Australia Post is still a vital service, making a $6 billion contribution to the economy thanks to parcel deliveries, a new report says.
The paper by Deloitte Access Economics, titled ‘Economic and Social Value of Australia Post’, follows a period of transformation and controversy for the service as it weathered dramatic falls in letter deliveries, plunging revenue, staff cuts and outcry over its former chief’s hefty salary.
The $6 billion figure cited in the report is a combination of Australia Post’s “direct” contribution of $3.2 billion to the nation’s gross domestic product plus another $2.8 billion as the estimated “indirect” amount of revenue created in other industries.
The online retail market is experiencing speedy growth with Australians spending $14 billion on online retail in 2017; this is expected to swell to $22 billion by 2022.
Australia Post’s response to this demand is set to grow, not shrink, the report found, as 80 per cent of Australians have “no convenient alternative delivery service”.
Furthermore, Australians of all ages remain regular users of Australia Post with 92 per cent having visited a post office in the past six months, with an average of 10 visits per person in that six-month period, the report said.
Other than parcel delivery, identity services such as passport applications and working with children checks keep Australia Post in demand.
The service also remains critical to those in regional and rural areas, with 58 per cent of Australia Post branches situated in those areas.
“There are now about 1500 communities in Australia without a bank branch, and many more without access to government agencies, where Australia Post provides access to Bank@Post and other essential services including driver’s licence renewal,” chief executive Christine Holgate said.
Despite the upward trend in parcel deliveries, letter volumes, which peaked in 2008, have fallen by 26 per cent over the past three years.
Ahmed Fahour, who announced his departure as the company’s chief executive last year amid a political furore over the size of his pay, pocketed a long-term incentive payment of $4 million on top of his $6.8 million in salary, short-term incentives and super.
This followed thousands of job losses in the previous years.
The Deloitte report was compiled using a national survey of more than 2000 Australians, economic modelling provided by Australia Post, and consultations with stakeholders, such as post office licensees.