Senator the Hon Helen Coonan
Minister for Communications,
Information Technology
and the Arts

Deputy Leader of the Government
in the Senate

The Business of Mail

Address to 13th Annual MMUA Coference

Sydney
Wednesday 16 August 2006

I am delighted to be back to open the MMUA’s 13th Annual Convention.

Thirteen is considered unlucky by some, but this year is actually the twentieth anniversary of the registration of the MMUA, so the superstitious among us need not worry about 2006.

But I do want to congratulate the MMUA for achieving this milestone.

I am sure the long history of cooperation between the Government and the MMUA will continue well into the future.
At the outset, I would like to congratulate Hank on his appointment as MMUA President, and I look forward to working closely with him.

I also appreciate the hard work over the years of his predecessor, Chris Smith.

Chris and John Gillroy have, of course, been the human faces of the MMUA for the past 11 years and they have certainly made their mark.

Chris especially has been a valuable source of information over the years and I wish him all the best.

Might I suggest to Graeme John that he seriously consider putting Chris on a commemorative stamp –perhaps even a whole series?

Each year, this convention provides an excellent forum for discussing the big issues facing the industry.

And the program for the next two days promises some fascinating perspectives on important topics such as the impact of technology, strategic planning for management and the challenges of this age we live in.

The outstanding quality of the speakers, I am sure, will produce informed and fruitful discussion of these and other issues.

This year’s theme is “The Business of Mail” and while the Government’s business is governing, it is also in the mail business through ownership of Australia Post.

Challenges facing Australia Post

There are, of course, challenges confronting Australia Post in its traditional business.

A recent article in the Australian Financial Review stated publicly what many suspected privately: electronic substitution has placed enormous pressure on Australia Post’s reserved service and it is increasingly reliant on growth in its non-reserved services.

The Corporation is, in revenue terms, experiencing a change from primarily a high volume letter deliverer to a high value parcels and logistics business.

Despite the international trend towards declining volumes, Australia Post is still achieving a small increase in letter volumes – and that’s a highly commendable outcome in the circumstances.
I know that many of you are working closely with Australia Post to ensure the continuing relevance of paper-based mail.

I am aware that today’s keynote speaker, Professor Peter Danaher has some interesting –and generally positive - observations on the future of paper-based marketing.

From the Government’s perspective it is very important that Australia Post continues as a viable deliverer of mail and related services to all Australians.

Technology

The Australia Post network is still important to commerce in this electronic age, and is of particular importance to those living in regional, rural and remote areas.

Despite the enormous changes in communications technology, I am happy to admit that my attention is still caught by a personally addressed letter.

It is more than just nostalgia, I think, to say that a letter offers a more personal touch; although even this may be changing.

At a conference I convened last year on IT I heard an expert on ‘Generation Y’ say that after learning of a relative’s death, his teenage brother sent an SMS of condolence.

To me, this shows that just because the technology exists, that does not mean it is always the best or most appropriate option.

The convenience of the sender does not always match the expectations of the receiver, and I believe Peter Danaher’s presentation will give us more insight into the role that receiver preferences play in successful communication.

Government Policy

Returning to the observation that the business of Government is governing, I believe Australia’s postal system is world-class.

In 2005 the Universal Postal Union ranked Australia fifth out of the twenty – three industrialised countries. In addition, Australia received a quality of service rating of 95 per cent – the average ranking being 89.9 per cent.

The success of the Australian postal sector internationally demonstrates that the regulatory settings for the industry are about right.
Over-regulation can choke innovation, while reliance on market forces may not provide and usually do not provide adequate services in less attractive markets.

The Government’s approach is to provide a regulatory framework that gives customers the best possible postal services, while allowing industry the flexibility to respond to competitive forces and opportunities arising in the market or through new technology.

I am keen for Australia’s postal industry to continue to grow and for it to maintain its relevance in the communications market.

The mailing industry must also continue working together on key issues, like educating people about more effective use of the system.

Postal Industry Ombudsman

2006 was a significant year for the postal sector in many ways as the Government has, at last, after five years of trying – fulfilled the election commitment of establishing an office of Postal Industry Ombudsman.

We wanted to provide consumers with a recognisable, dedicated and independent entity to deal with complaints about the provision of postal services.

Although I hasten to say the number of complaints is few but that is not to say we don’t need a complaints mechanism.

I am happy to say that, after extensive public consultation and final passage through the Senate in March, those key features have been incorporated into the scheme.

It has been a long road, but it is now a reality.

I formally launched the PIO last month with Australia Post’s Managing Director, Graeme John, and the Commonwealth Ombudsman, Professor John McMillan.

At the launch, both Graeme and John stressed the benefits to private postal operators of opting into the PIO scheme as we know it is a voluntary system.

It is in the interest of the postal industry to fully embrace the role of the PIO and I also urge all of you to register.

Rural and regional Australia

As part of the Federal Government’s commitment to rural, regional and remote Australia we are working with Australia Post to ensure that postal services in the bush remain at high standards.

These standards of course require that Australia Post service 98 percent of postal delivery points at least 5 days a week and 99.7 percent of all delivery points at least two days a week.

In early 2005, at my request, the Chairman of Australia Post undertook to maintain and, where possible, improve existing delivery standards.

This undertaking will ensure that all Australian’s, not just those living in metropolitan areas, will continue to have access to a world class postal system.

The Government also committed to extend electronic banking services – known as Bank@Post - to more post offices.

Up to $9.7 million will be provided over four years to the Bank@Post initiative, which builds on the earlier commitment of $70 million for the Rural Transaction Centres Program.

Under the Regional Partnerships program 58 Licensed Post Offices (LPO’s) have already been installed with Bank@Post services, and all 266 LPO’s are scheduled for completion by the end of 2006.
This commitment will further enhance the electronic banking services available to those in rural and metropolitan areas.

While technology may be challenging the traditional concept of mail, it is assisting the Government and Australia Post to deal with the increasing threat of terrorism.

Wearing my IT Ministers hat I often say that where life presents a problem, so often technology presents the solution. It is not technology for the sake of it - it is what technology can do.

Counter - terrorism

A joint initiative between Australia Post and the Australian Customs Service saw the introduction of state of the art technology to strengthen our counter – terrorism capabilities at international mail centres.

Additional screening facilities have been installed at the major international gateways in Sydney and Melbourne as well as the introduction of risk and crisis management programs for personnel.

All these measures are designed to ensure the defence and security of Australia and Australians and unfortunately increasingly we are going to see the need for this kind of infrastructure.

Junk mail

In the lead up to the 2004 Federal election, the Government committed to a number of initiatives to further improve the Australian postal system and concerns raised about the delivery of unaddressed mail.

The Government recognises the complexities involved with this issue.

We understand that on the one hand unaddressed mail does contribute to jobs in the industry and that is not insignificant, while on the other hand not everyone likes to receive this material and their wishes need to be respected.

It is important that we can find the right balance.

The Government is committed to establishing an effective industry based complaints mechanism to give people who continue to receive unwanted, unsolicited mail an avenue to complain and have that complaint acted upon.

To address these issues, the Government supports the framework established by the Distribution Standards Board (DSB) which assists householders’ requests not to receive junk mail in mailboxes where ‘No Junk Mail’ or ‘No Advertising Material’ signs are displayed.

It makes good sense for the industry too, as you can save resources by targeting only the people who are interested in receiving this type of mail.

As with most complex issues where there is certainly a diversity of views, there are many courses of action that could be taken. That said, I am of the view, that on the whole, self – regulation has been successful.

However, there is more that can be done and now is the time for industry to have their say on the matter.

The Government will continue to work with industry and consumers to raise awareness both within and beyond the sector to provide a solution that address both the concerns of industry and the desires of consumers.

Bulk mail

I also wish to mention today the 2004 amendments to the Australian Postal Corporation Act relating to bulk mail services.

This is a matter of keen interest I know to many MMUA members given their close involvement with Post’s bulk mail service.

The amendments will expand the capacity of the Australian Competition Consumer Commission (ACCC) to inquire into disputes between Australia Post and a person seeking access to the bulk mail service.

While the ACCC was previously confined to considering the actual discount rate offered by Post, the amendments allow the consideration of any of the terms and conditions on which the discount rate is being offered.

Regulations are currently being developed to give the ACCC this capacity.

The MMUA’s views in this respect are of vital interest to the Government and I can assure you that consultation will take place at the appropriate time.

We don’t want to overreach here but we want to make sure we get this aspect of bulk mail correct.

Conclusion

The Government understands that the business of mail is about meeting the expectations of all Australians for effective and economic access to mail services.

The various initiatives I have outlined will ensure Australians continue to have a world-class postal regime that offers value for money and a wide range of services, including for the elderly, disabled and those living in rural and remote areas.

The future is not without its challenges, of course.

Traditional mail is an industry facing the challenge of electronic substitution and the industry must continue to seek market niches that value add to better refine your product.

Mail is also adjusting to a world where safety and security concerns are paramount, and takes up a great deal of our time, and where white powder spilling from an envelope can cause significant disruption to operations.

The Government will continue to work closely with the mailing industry to ensure that we work through such challenges together and try to ensure this is not a disruption to your business.

It is now my pleasure to declare the Major Mail Users of Australia Convention for 2006 officially open.

I do wish you well for your discussions over the next two days and I look forward to hearing the outcomes and what industry is really thinking so that our policy discussion will meet the needs of consumers.

Thank you