With the dramatic fall in the use of postal letters and rising costs, the future of local postal services is under review and the Australian Government is calling for public submissions on the future of Australia Post.

The review rules out privatising Australia post and makes it clear that Australia Post will continue to provide universal and equitable services for the community and business.

But it also notes that Australia Post has to be financial sustainable and capable of delivering improved services for the future in an increasingly digital world.

Providing appropriate coverage of a post office network particularly in regional and rural areas remains an important objective.

Probably the biggest issue is the extent to which operating costs for delivering letters  and running post offices can be reduced to make Australia Post sustainable for the future.

The overwhelming majority of letters are now from businesses. Few people still write to one another. Digital communication is now by far the dominant form of both business and personal communication.

As a result the number of postal letters has declined by two thirds since their peak 20 years ago. With increasing digital communication, there are also fewer visits to post offices.

On the other hand with much greater use of online shopping, parcel delivery has become a much more substantial part of Australia Post’s business. But Australia Post has to compete with other businesses in the parcel market.

The problem for Australia Post is that is it required to provide letter services and a network of post offices and these are no longer economic at their current charges. This threatens their longer term sustainability.

There are a range of options to address these problems, including less frequent letter delivery, fewer post offices and higher postal charges. The range of possible options are canvassed in the discussion paper.

Members of the public are encouraged to read the paper and make a submission.