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Issue #1643      June 18, 2014

Australia Post

Resistance to sackings and privatisation

Mass meetings were held last week in opposition to the government’s plans to sack 900 Australia Post employees, mostly management and administrative staff in the organisation’s Melbourne headquarters, and to split the organisation in two. The government is likely to cut another 4,100 positions and these moves are widely seen as a prelude to selling off the organisation in whole or in part.

Australia Post’s Chief Executive Ahmed Faour.

The government denies it’s going to do so. Nevertheless its initiatives are clearly intended to transform the organisation into an attractive commodity for the private sector. Under the government’s plans the parcels and logistics services would be separated from letter delivery and retail operations. The parcels business is already highly profitable and expanding, so it’s a sitting duck for immediate privatisation.

That leaves the letter delivery service. It’s certainly true that the demand for letter delivery has fallen, but it’s not true that it will cease altogether. There will always be a need for delivered mail. When the internet appeared many commentators predicted it would lead to the end of the printed media. It hasn’t, nor will it kill off the demand for letter delivery.

However, the government will undoubtedly claim that individual letter delivery is now in effect a “boutique” specialty service, for which the public must pay extra fees or accept a slower delivery time. An indication of this trend is the government’s offer to private businesses of either a three to four-day mail delivery time for a standard fee, or else a quicker two-day mail delivery for a premium.

That has infuriated owners of many small businesses which depend on the postal service. Undeterred and determined to turn a negative into a positive, Australia Post’s current chief executive Ahmed Faour recently declared with cheerful enthusiasm: “… we created choice for them at different price levels. Now they get to choose the service they want for the price they are prepared to pay!”

The commercial imperative

Much of the controversy over the government’s proposed treatment of Australia Post is Faour’s $4.8 million annual salary, which is a great deal more than the head of the US Postal Service receives.

The idea of cutting back Faour’s salary or terminating his contract altogether sounds really worthwhile, especially given his reportedly dismissive treatment of Australia Post’s employees.

However, his bloated paycheck is also indicative of his real role within Australia Post. The job for which the Abbott government is paying him is to change Australia Post into a cash cow for the private sector, rather than ensuring that it continues to provide an essential public service for minimum cost.

That commercial imperative underlies Australia Post’s controversial sponsorship of the recent Olympic Games in London, a seemingly insane decision for an organisation that the government has described as teetering on the brink of insolvency.

There are precedents for providing largesse to the private sector at public expense. About 30 years ago successive Liberal and Labor governments began selling off many of the nation’s post office buildings (particularly those with historic significance), which were often highly coveted by private developers. Australia Post was then forced to pay rent, which made it increasingly difficult for it to cover its operating costs.

During that period the magnificent Sydney General Post Office had a multi-million dollar facelift under the expert and very conscientious supervision of the former Commonwealth Department of Housing and Construction.

However, the building was then leased for 99 years to Macquarie Bank, and the Department of Housing and Construction was then split up into separate businesses which soon afterwards were sold off.

The government subscribes to the neo-liberal view that almost every function of government should be carried out by the private sector. Accordingly it has been considering whether some activities carried out by a number of government agencies could be transferred to the private sector or discontinued, or a least be transferred to Australia Post, thereby allowing those agencies to be greatly diminished in size and scope.

In consultation with Faour the government has therefore been exploring the possibility of activities which involve interaction with the public being carried out in post offices – that is, assuming that Australia Post’s own functions involving public interaction have not already been privatised.

The way ahead

There’s no need for Australia Post to cut staff because it’s making a loss in one area of its operations. Although the government complains bitterly about the financial losses incurred by the letter delivery service, Australia Post as a whole made a $142 million profit last financial year because of the additional demand for its other services.

The logical approach to the loss in demand for letter delivery would be to simply transfer employees from letter delivery to the parcels business, and/or to train employees so they’re multi-skilled and can move from one service to another according to fluctuations in demand.

However, that would become difficult if Australia Post was split into two sectors, and impossible if either sector was sold off. In any case the government is not interested in saving jobs; it’s interested in serving the corporate world.

As commentator Elizabeth Farrelly noted caustically last week: “…as government ... conceives of itself as business, [then] business inevitably starts to set policy. So we get coal lobbyists writing energy strategy and the Urban Task force dictating planning.”

For the Abbott government, serving the corporate world means slashing Australia Post staff numbers prior to selling off the organisation, so that the remaining employees are worked as hard as possible, thereby minimising the organisation’s salary bill and offering maximum potential profits for a future purchaser.

The best solution of all for the 32,000 employees, and for ordinary working people and small businesses that depend on Australia Post would be to get rid of the Abbott government as fast as possible, and to ensure that if Labor takes its place it doesn’t follow the Coalition’s lead with regard to postal services.

Next article – Thousands rally against budget

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