Thank you Chair and Senators.
My name is Paul Graham, I am the Group Chief Executive Officer and Managing Director of Australia Post, and I am joined today by Nick Macdonald, our Group Corporate Secretary.
I would like to start by acknowledging the traditional custodians of the Canberra region, the Ngunawal and Ngamberi peoples and pay my respects to their elders past and present. I thank the Committee for the opportunity to provide this opening statement.
As you know Chair, we have been to this Committee many times over the past three years with news of our deteriorating financial outlook.
When I joined Australia Post in September 2021, it was clear there were deep structural problems with the business, including the unstoppable decline over the past decade in our Letters business as well as the transition from over-the-counter transactions to digital services.
Thanks to the dedication and commitment of the Australia Post team, a relentless focus on improving the business and historic phase one reforms, we are starting to see some early green shoots of recovery.
I'm pleased to report our Post26 strategy is delivering. The business has worked hard to focus on the right things, stripping out unnecessary cost and complexity, driving efficiencies, tightly managing our expenses, and simplifying our operations. We are making a major impact on the things that we have control over.
We continue to focus on what matters most for our customers - flexible and more reliable parcel deliveries, new and innovative services, greater online accessibility through our market-leading app and better customer service.
Additionally, we are driving positive changes in our Post Office retail network in conjunction with our valued licensees, as we work to ensure there is adequate compensation for their services, particularly Bank@Post.
This is a step in the right direction and a good outcome for our customers, our team members, and the broader community.
But of course, the job is not done. We have a lot more work to do to streamline our business and further reform is essential to ensure Australia Post has a sustainable financial future.
The first phase of our modernisation, including the change to our Letters business, is progressing well following the new regulations that took effect in April this year.
These frequency changes, which are being progressively rolled out across the country, will ensure Australians continue to receive their mail in a timely manner but will also allow more of our posties to support the ever-growing eCommerce sector. We still deliver priority and express letters daily and important mail like postal votes will continue to be returned inside the required deadlines.
But with households now receiving less than 2 letters per week and individuals sending around 3 letters per year, it was simply not viable to continue with the status quo.
Even with the recently approved 30 cent increase in stamp prices, Australia Post will still lose money on every letter sent, but we are committed to continuing to serve our community.
This commitment to Australia is unwavering and there is no better example of that than in our Bank@Post services.
Australia's banks have closed thousands of branches across the country over the past few years - including branches in hundreds of regional towns. Australia Post has stepped in to fill the void they've left behind.
Australia Post is managing close to $10 billion of cash annually. As banks accelerate their closures, they are saving billions of dollars.
The inquiry into bank closures in regional Australia released their final report last month and highlighted that banks have shifted costs onto Australia Post, effectively subsiding bank profits.
In addition to this, we are also facing increasing technology and compliance costs and customer demands for additional services, particularly for small business customers. We are now processing over a million business transactions annually on behalf of the banks, which was never envisaged or intended when Bank@Post first commenced. In some cases, we are unable to meet customer demands.
As a result, Bank@Post is on a mid-term trajectory of significant losses, unless our bank partners provide additional funding. As part of this we also need to consider ensuring the physical outlet is equipped to handle the extra customers, and the increased safety and security measures for customers and our team members.
We are talking to our banking partners now and I am confident they recognise their obligation to re-committing their support of Australia Post, so that together we can continue to service their customers, particularly in rural and regional areas.
We are also involved in discussions with the banks and Armaguard to ensure cash remains available to the community. As the Treasurer has noted, cash plays a very important role in the economy and must be available to those Australians who want it.
A sustainable solution needs to be found for cash delivery nationally, but Australia Post is not the answer. We simply do not have the infrastructure and resources required to deliver significant amounts of legal tender around the country. But we will do what we can to support a sustainable cash delivery solution as part of our commitment to put our customers and the community first.
We are committed to ensuring the safety of our frontline Posties, who in recent years have been subject to an increasing number of dog attacks, often from dogs that at first glance appear non-threatening. Yesterday we launched a new safety campaign calling on all dog owners to properly secure their dogs.
This is an industry-wide issue and over the past six months alone, more than 11 Posties each day are falling victim to a safety incident involving a dog. While half of all incidents occur on a customer's property, more than a quarter of incidents involve dogs roaming the streets. We are focused on highlighting these important safety issues and working hard to ensure our team members stay safe while performing their vital role of delivering for our customers and the community.
Earlier last month we awarded $250,000 in grants across 152 organisations. Our People of Post grants program supports projects that align with our four community focus areas - mental health, disaster support and resilience, Indigenous children's literacy and learning, and environment and sustainability. We have also just opened up nominations for our Community Grants program that provides funding of up to $10,000 to support projects that directly improve mental health and wellbeing in the wider community.
And we have just distributed five million post cards for the Beyond Blue Connections mental health campaign. This campaign is designed to highlight the important relationship between people staying connected and mental health.
In closing, on behalf of the Board and management, I would like to record my thanks to the Australia Post team, the government, our licensee and union partners, and this parliament for allowing us to make the changes needed as we work together to deliver a better tomorrow and create a sustainable Australia Post.
