Australia Post's 'win-win' in the mail

lllustration: Kerrie Leishman

Australia Post chief executive Ahmed Fahour is on tenterhooks as the May 13 budget looms and the Abbott government prepares to release the Commission of Audit's report on how to make the government leaner and more efficient.

The report and the government's response to it could be a game-changer for the business that Fahour runs. What he has described as a ''win-win'' would see Australia Post's role as provider of government services expanded significantly, cutting government service delivery costs and giving Australia Post new income to offset growing losses on its mail delivery service. Australia Post lifted net profit by 11 per cent to $312 million and paid the Commonwealth government a dividend of $244 million in the year to June 2013, but the profits all came from an unregulated part of its business, express delivery services notably.

Its regulated mail business lost $218 million, and Fahour told a Senate estimates committee hearing in February that the decline in letter volumes was accelerating, and likely to push the group onto losses in the June half this year for the first time since its corporatisation in 1989.

Australia Post is already a major agent for private sector companies and government agencies, processing payments and documents for more than 750 entities, including passport applications, land title transactions and licence renewals.

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In a submission to the Commission of Audit, the group has argued, however, that its coverage could be expanded to include other government services and payments, including ones currently delivered by the Department of Human Services and its main retail ''face,'' Centrelink.

It would be radical expansion and one that would not be without execution difficulties. In appearances before the Senate estimates committee, Fahour was grilled by Labor senator Doug Cameron about Australia Post's qualifications to expand into areas that involve case management, for example.

The commission's report and the government's initial response to it will be released before the budget. The commission was asked to find ways to cut service delivery costs and end duplication, and the private sector provides a template.

Many large companies have already consolidated service functions that existed inside separate divisions into single ''shared services'' operations that each division accesses. Similar changes inside the government would be sweeping, and Australia Post is a potential services supercentre for the government because it operates Australia's largest retail network, with more than 4400 outlets, including more than 2500 in rural areas.

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Australia Post's 'win-win' in the mail