The Communications Workers Union (CWU) has called for Australia Post to expand its services to include banking and insurance. The postal workers' union said this would help strengthen Australia Post as a public enterprise, while challenging the power of the big four banks and improving services in regional and rural areas.
The CWU made the proposals in its submission to the federal government's Commission of Audit. The commission was set up late last year to make plans to implement Prime Minister Tony Abbott's neoliberal agenda of privatisation and budget cuts. The CWU's proposal is a positive step in the opposite direction — to defend and expand the public sector, and begin to take back the wealth of big business.
The CWU submission "aims to provide strategies for: The financial viability of Australia Post into the future; maintaining the standing of the Australia Post brand which is a trusted Australian icon; ensuring that existing postal services are maintained; the protection and maximisation of meaningful employment; and the continuance of Australia Post as a public asset which has public service as a priority."
Introducing its proposal for expanded services, the CWU submission says: "Australia Post's retail network should be given more freedom to leverage off of the trusted icon status, especially in rural and regional areas, and move into new services such as banking and financial services, insurance services and communication services.
“This would enable 'one stop shopping' for communities and help fill the vacuums that have been created by the banks and other service withdrawals from regional and rural Australia. Additionally, both individuals and businesses in metropolitan areas would benefit from an added competitor to the big four banks and the obvious reduced cost of banking that would ensue.
"We include examples from around the world to support our submission and suggest that the provision of extra services by Australia Post would yield results that would surpass those experienced by international counterparts, given Australia's unique geography. Australia lends itself to being a natural monopoly given its large landmass and sparse population."
The CWU submission uses the examples of Kiwibank, established in 2001 as a wholly owned subsidiary of New Zealand Post Limited, which now services more than 850,000 customers; La Banque Postale, France, which was established in 2006 as a subsidiary of the national postal service, La Poste, provides banking services to 10.6 million customers, and is now the second largest employer in France, after the government; and Banco Posta, Italy, which was set up in 1999 following the restructure of the Italian Post Office, is wholly owned by the Ministry of Economy and Finance, and made a €343 million profit in 2012.
CWU assistant national secretary Martin O'Shea said: "The federal government doesn't seem to be completely pro-competition. The big four banks with their market share, and billions of dollars in profits, there's an opportunity for Australia Post to compete against them, but there's a reluctance on behalf of some in the government who probably see that as government competing against the banks," the Sydney Morning Herald reported on January 22.
University of Queensland economist John Quiggan told the SMH on January 25 he supports the CWU plan. He said: "Australian banks are highly profitable and have been protected on a 'too big to fail' basis. Australian banking consumers would benefit from an expansion of competition and from the option of a basic bank with a range of low-cost standard services.”
In the same article, Terry Ashcroft from the LPO Group, which represents the interests of licensed post offices, said extending banking to Australia Post would be a "win-win" situation for the federal government. "It would become a fifth pillar, and the big banks wouldn't like it.
"But it would generate probably between $1.5 and $2 billion net revenue for Australia Post, allowing it to subsidise a lot of its community service obligations ... while giving a huge return to the Australian people. The only loser would be the major banks."
Australia Post is already "the country's biggest retail network, and has 4429 retail outlets, nearly 60% of which are in rural and regional Australia. The majority of its outlets act as agents for the big four banks and about 70 other financial institutions, providing banking and insurance services, among other things," the SMH reported.
Australia Post is strategically well placed already to operate a national banking licence — and move into the vital public banking space lost when the Hawke-Keating Labor government privatised the Commonwealth Bank in the early 1990s.
This intervention by the postal workers' union is very timely when big business spokespeople are stepping up calls for privatisation of Australia Post, Medibank Private and other government-owned entities.
Rod Simms, chair of the Australian Competition and Consumer Commission (ACCC), told the Australian Financial Review on January 6 that selling publicly owned assets such as Australia Post, energy providers and Medibank Private "will be the most important driver of how Australia improves its productivity."
These comments were slammed by the Communications, Electrical and Plumbing Union.
CEPU Postal and Telecommunications NSW branch secretary Jim Metcher said the benefits Australia Post provided to the wider community were far reaching, especially the job opportunities and diversity of services it provided to rural and regional Australians.
"Privatisation would result in thousands of job losses and the closure of hundreds of post offices around the country. This would have a significant negative impact on both the regional workforce and the full range of postal services provided to people who live in country regions," Metcher said, according to the January 6 online edition of The Land.
Joan Doyle, CWU Victorian secretary, said the sale of Australia Post would be "a disaster for the community and our members."
"Australia is a really big continent and it's sparsely populated, and the whole postal service works on a cross-subsidisation process," she told the SMH on January 7.
Australia Post currently makes a loss on letter delivery, but a huge profit on its expanding parcel delivery system, driven by online shopping. Adding in a substantial income from a public bank, Australia Post could be a highly profitable arm of government — providing a huge boost to the public coffers, available for spending on health, education, social welfare and the environment and cutting into the massive super-profits of the big banks.
To ensure that the operations and public income from Australia Post are in the people's interests, workers would need to fight for the national postal-banking service to be placed under workers' and community control. The example of Telstra, when it was corporatised before full privatisation, shows that government ownership is not sufficient in itself to ensure public enterprises function in the interests of the community.
Australia Post could also expand further into a network of government shops, challenging not only the big banks but the private supermarkets, especially Coles and Woolworths, by taking on a wider range of consumer products than it already handles.
An international example of such a government initiative is the Mercal program in Venezuela, where a network of public shops set up by the socialist government in Caracas initially to sell cheap food to the people in competition with the private sector, has now been expanded to distribute white goods and computers.
It will require a major campaign by unions and community groups to save Australia Post from being privatised by the Abbott government and its greedy corporate masters. Working people need to mobilise to defend our public postal service — and to extend it into the banking and an expanded retail area, as a step toward a stronger public sector committed to the interests of workers and the wider community.