Australia Post

Australia Post is seeking a 10% increase in the price of posting a basic letter. The ACCC has announced an assessment of the proposal. I would prefer to see the new Labor Government conduct a review of postal services before any decision is made on this increase request.

European countries in 1997 agreed to a regulatory framework which sought to gradually limit the exclusivity of the postal services in each country. eGov monitor has more on this.

My beef with Australia Post is that their 865 government owned retail outlets have agressively gone after newsagency customers over the last ten years. They have leveraged their government protected monopoly over maiol services to bring customers to these retail locations for a fraction o the cost to newsagents to attract customers. This is a Government business taking business from family run operations. It’s unfair and hurts family run newsagencies.

So, I’d prefer a broader inquiry before the 10% increase is considered – what is best for Australians in the area of competition policy in relation to a postal service.

The latest catalogue promotion from Australia Post, running Jan. 28 through Feb. 17, is a rip off in my view.  Take page 5 (see photo) – HP 56 + 57 twin pack.  The Australia Post price is $69.95.  The price in my newsagency is 10% less yet I don’t have the buying power of thousands of stores nor do I have a government protected monopoly pulling people in.

Australia Post will charge you $22.95 for a Canon BCI-24BK twin pack.  Our price is 13% less.  Australia Post will charge you $43.95 for a HP 21 + 22 combo pack whereas at newsXpress Forest Hill you’ll pay 8% less.

Australia Post is clearly not the place to be buying printer ink and toner.  We beat them on price.  We also beat them on service – at Australia Post you have to stand in the conga line for ages to have your question answered.

It is bad enough that a government owned and protected retail channel competes directly with a small business like mine.  That they rip their customers off as they are with their current printer ink specials is appalling.

The government owned Australia Post retail outlet opposite my newsagency at Forest Hill was closed today.  Yes, they pick and choose how they interpret the Act of Parliament under which they conduct their retail network.

Today’s closure is arrogant and demonstrates the value of their monopoly.  An unprotected business could not close today.  No major shopping centre landlord would stand for it.

I am annoyed because I rely on Australia Post to draw people to our end of the centre.

if it’s good enough for an independent small business to carry the cost of public holiday penalty rates then it’s good enough for a protected government owned retail chain.

Stapled to the official Australia Post Order Form was the real reason for their junk mail in our post box – a one page sheet announcing: 1 DAY ONLY, 10% OFF STATIONERY.  This is further evidence of the Government owned business using its monopoly to take retail sales from independent retailers like newsagents.

The previous government said that Australia Post only offred retail products as incidental to portage products and services and that it would never abuse the monopoly to take retail business from others such as newsagents.

It will be interesting to see is the new Labor Government addresses this issue, whether they allow Australia Post management to continue to use government protection of their monopoly to take retail sales from family run newsagencies.  The stakes are high.  There are unions in Australia Post to consider as well as mums and dads who own newsagencies along with their tens of thousands of employees.

It all comes down to interpretation of the Act of Parliament under which Australia Post operates.  My reading is that the stationery flyer attached to the postal service form is not permitted under the act.  But I would take that view, it suits me.   A person or body less conflicted than me needs to look at this and advise the Government on how to navigate the issue.  If Australia Post is left to its current pla, there is no doubt jobs in newsagencies and other businesses will suffer.

While car makers battle cheap imports and farmers battle a drought, newsagents are battling their own Government which appears intent on wrecking small family businesses. Despite robust representations, the Government has facilitated the push of the retail network it wons to take more revenue from newsagents. This is a scandal.

This new catalogue from Australia Post offers further evidence. Here we have over 800 government owned and protected retail outlets pushing deeper into categories previously well served by newsagents. Not one page of this sixteen page catalogue offers postage product (except for a subtle reference to postage) yet it relies heavily on the protected Australia Post brand.

I am all for competition, but not driven by a government owned and protected retail network which is operating, in my view, outside the provisions of the Postal Act.

Every dollar taken by an Australia Post government owned store for stationery, greeting cards, colouring books computer media and calendars is a dollar missing from a small business competitor. Where is the economic sense in Government shifting this revenue from private enterprise to its operation?

Not I says John Howard, the Prime Minister who has allowed, on his 11 year watch, Australia Post to considerably expand, through its government owned retail stores, its reach into retail categories previously served well by independent small business newsagents.

Not I says Helen Coonan, Minister responsible for Australia Post, who ducks behind the legislation as the reason her hands are tied. Apparently controlling both houses of parliament does not give the minister to go against Australia Post management or the Government’s desire fro profits from their monopoly based corporate-store retail operation.

Not I says Fran Bailey, minister for Small Business in the current government who stands behind Minister Coonan and everything she says about the legislation allowing Australia Post to compete directly with small business newsagents.

Not I says Kevin Rudd who remains silent on this issue of vital importance to the thousands of working families connected with newsaegcnies as owners, employees and suppliers.

This Government took away the one monopoly newsagents had in 1999. It did so without compensation. Ignoring overseas best practice on competition policy, it has continued to protect Australia Post and has sat on its hands while Australia Post management has aggressively and deliberately targeted the weakened newsagency channel.

Newsagents are not big news. People this they are rich and can fight for themselves. Sure, we can fight, but we need a level playing field. When it comes to the Australia Post corporate stores this is not the case. They have monopoly protection and and they levearge this to get further and further into the newsagency space.

Do politicians care about small business? I suspect not. Sure some are great at beating their chest and saying they are friends of small business and friends of newsagents. These noisy folk need to be asked for proof. I can’t find it.

The photo is from the Government owned Post Office opposite my Forest Hill newsagency this morning. This shop sucks people in with products and services protected by the legislation and pitches cards, books, stationery – all manner of things – while the poor blighters are stuck in a line waiting to get to the counter. Yep, this is the Government’s small business policy on show for all to see.

Take a look at the latest Annual Report from Australia Post and see how successfully this wholly government owned and government protected enterprise has leveraged its monopoly brand even more successfully this year to take revenue from Australia’s family owned newsagencies. Mr Howard and his team have permitted and even encouraged the 846 Australia Post corporate stores to go after newsagencies in the areas of stationery, bill payment, phone recharge and other areas. They hide behind the legislation and conveniently forget that they can change this. yes, they care about small business.

Attached to the Order Form listing a range of products available exclusively through the Government owned Australia Post retail outlet is a flyer promoting a one day stationery sale – 10% off all stationery.

This is the Howard Government’s small business policy at work. While in office they have facilitated Australia Post fending off competitors and maintained it as a protected monopoly in traffic generating areas such as postal products and services. They have actively encouraged Australia Post to use its protected brand to go after family run newsagencies in the stationery category.

Now, the government allows its wholly owned business to offer a 10% stationery discount tied to its monopoly products.

Yep, small business policy in action.

In 2004 I discussed this with Senator Coonan, the Minister responsible for Australia Post, and she pointed to the legislation – hid behind it might be a more appropriate way of putting it. The Howard Government has been in control of this legislation for over eleven years. They have done nothing. Indeed, they have encouraged the growth of Australia Post and its strategy of taking revenue from family run newsagencies for the benefit of Government coffers.

This Australia Post 10% off stationery flyer is proof that the Howard Government has no interest in small business. They know the financial and emotional hardship their wholly owned business is causing newsagents yet they sit back and watch.

Senator Helen Coonan speaking on the 7.30 Report on ABC TV last night:

…we clearly couldn’t have the conflict of being both the owner and the regulator.

This from the same Communications Minister happy to be responsible for regulating the government owned Australia Post.

Australia Post, holder of a postal monopoly in this country, also owns 865 corporate stores which compete with small business newsagents in the stationery category.

This same government deregulated the distribution of newspapers and magazines in 1999, stripping newsagents of their monopoly without compensation.

Australia Post has unleashed considerable corporate muscle against newsagents in the years since 1999. Much of that corporate muscle has come as a result of its Government protected monopoly.

For some background on the Government facilitated Australia Post assault on small business newsagents through its corporate stores click here.

In 865 Federal Government owned Australia Post shops right now you can see how serious the government is about small business. Leveraging the conflicted positions 100% ownership of Australia Post and controlling legislation which governs Australia Post, the Government has ensured its annual profit windfall. Over the last eleven years this windfall has come at a significant cost to small business including newsagents.

Take the current twelve page Australia Post brochure: page after page of stationery items which, on my reading of the Act, fall outside activity permitted by the Act under which Australia Post operates. My newsagency, like any newsagency competing directly with a Government owned Australia Post retail outlet, fights every day for stationery business. Newsagents have been in stationery since the 1880s. Australia Post has beefed up in this category during the last eleven years.

That Australia Post government owned stores so aggressively and blatantly target independent small business newsagents is evidence of how the Government views small business.

Helen Coonan, the Minister in the government responsible for Australia Post will say that the legislation con trolls Australia Post – as if to wash her hands of the situation. Her Government controls the legislation and can prove its small business credentials by taking the Government owned stores out of this direct competition.

Australia Post has an unfair advantage in that it uses its protected monopoly of postage services to drag traffic to their retail outlets. Newsagents do not have this luxury, it costs us far more to land customers in our stores than Australia Post.

Here is evidence of the power of the Australia Post monopoly. I took the photograph below at 12:20 on yesterday (Saturday) at the Government owned Post Office opposite my newsagency. Most people are prepared to wait in this line which snakes through the Post Shop because of the monopoly Australia Post has on a range of products and services. This monopoly lands these poor folk into the Post Shop for a fraction of the cost of landing people in my newsagency. This comparison is relevant because Australia Post, now more than even, is chasing traditional newsagency lines of stationery and greeting cards. If they had to land customers for these items without using the protection of the Government monopoly they they would not be chasing small business newsagents as they are.

A government concerned about small business would not allow the monopoly it grants to be abused by taking business from small businesses like mine.

Thank God for an election year! Like bees to a honey pot the politicians are attaching themselves to any issue which may deliver a vote or two. Yesterday, the issue was small business and the Government came a running with open arms! Well, years of neglect have made this small business owner somewhat frigid. I’m not feelin the love.

This is the same Government which owns the biggest single threat to small business newsagents – Australian Post. The Government has knowingly permitted, even encouraged, Australia Post to expand its government owned retail network into space previously served well by newsagents.

The proposed changes to the Trade Practices Act, while welcome, do nothing for the credentials of the Government as long as they permit their wholly owned Australian Post retail network to stalk newsagents.

The Government’s line, eloquently put through Communications Minister Helen Coonan, is that Australian Post needs to diversify to remain commercial. That’s nonsense. Take a look at France, Austria, Great Britain and the US. We’re pretty much on our own in permitting a government owned retail network to pursue small business competitors as Australia Post does.

Yep, small business policy at work. Not!