In the age of email, text and social media, Australians have more choice than ever when it comes to communication.
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But between the lines, there's a bleak message for the postal service.
"We will never make money in our letters business," Australia Post chief executive Paul Graham told The Canberra Times.
In 2008, the average household received 8.5 letters a week. Today, that's down to 2.2 letters - mostly from business and government - and even that is expected to severely decline in the coming years.
On Thursday, Australia Post announced a $384 million loss on its letter business and an overall loss of $200 million for the previous financial year.
It is only the second time Australia Post has been in the red in more than 30 years, but the organisation warned that its financial situation will continue to deteriorate without significant changes to the way it does business.
"Our warning is that we'll end up like [international counterparts Canada Post and UK's Royal Mail], which is sustained losses well into the future," Mr Graham said.
"We are not at that point yet. But I think today's numbers certainly show that we are on the precipice of getting to that point, unless we get logical government reform."
![Australia Post is on the precipice of a major shift. Picture by Karleen Minney. Australia Post is on the precipice of a major shift. Picture by Karleen Minney.](/images/transform/v1/crop/frm/209641672/b06e6e5c-41f6-4e36-a796-4894cfb01eab.jpg/r0_55_4138_2381_w1200_h678_fmax.jpg)
Relax the rules
Mr Graham said the regulations the organisation is governed by are vastly outdated, having been prescribed in 1989 when it became a government business enterprise.
He said if Australia Post was to remain financially viable into the future, it would need the government to review some of the regulations the business is currently obligated to operate under.
That includes relaxing the rules around setting stamp prices, cutting down five-day letter deliveries and reducing the number of post offices in metropolitan areas.
Mr Graham said Australia Post was "committed to their presence" in regional and rural Australia but wanted "some freedom" in redesigning the post office network in metropolitan areas.
Asked about the frequency of letter deliveries, Mr Graham would not be pressed on a specific number of days the enterprise would provide the service but said "it needs to reflect the actual volume of mail".
"We believe that it's important that we are visible in the community five days a week, but what you will see will be a combination of letters and parcels," he said.
The federal government is currently undertaking a major review of the postal service and is considering the options outlined by Mr Graham.
But it's also looking abroad for ideas. In its discussion paper, it notes that Germany's postal service raised letter prices, France injected hundreds of millions of euros into La Poste and neighbouring New Zealand adopted an alternate-day delivery model for non-rural areas.
The paper stated that while the changes "significantly" reduced costs to New Zealand Post, its government provided $130 million over a three year period to maintain the letter service. New Zealand Post reported a $115 million half-year profit in February.
The paper further points out that Australia currently charges 86 cents less to send a regular stamped letter than the average rate of OECD countries with two-speed letter delivery services.
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![Parcel delivery is still a booming part of the Australia Post business. Picture by Karleen Minney Parcel delivery is still a booming part of the Australia Post business. Picture by Karleen Minney](/images/transform/v1/crop/frm/pMXRnDj3SUU44AkPpn97sC/7b110943-db75-4aa5-925e-b4da1c2c1932.jpg/r0_476_5350_3484_w1200_h678_fmax.jpg)
Can't bank on online shopping
In contrast to its struggling letter business, e-commerce and parcel demands have grown, with the enterprise delivering more than half a billion packages in 2021-22.
Australia Post wants to capitalise on this boom by investing more into parcel services, including boosting the frequency of deliveries. But online shopping alone won't be enough to keep Australia Post afloat.
One idea that continues to resurface is establishing Australia Post as a bank.
Australia Post already partners with dozens of institutions to provide banking and financial services but some want the organisation to push the envelope.
Progressive think tank Per Capita said as a government-owned bank, it could offer basic savings accounts, checking accounts and regulated mortgage products to households and potentially small businesses.
"That could provide some competition that's lacking in our banking sector and put in place some really robust community standards," executive director Emma Dawson said.
"[It] is quite a radical idea in Australia, but it's not around the world, comparably."
The think tank suggests the move would especially benefit Australians "currently under-serviced by the existing banking sector" such as those in rural and regional areas.
More than 1100 communities across the country rely on Australia Post as the sole banking service in their area. But a spokesperson for Communications Minister Michelle Rowland said the government currently had no plans to establish an Australia Post bank.
Mr Graham however said the organisation was expanding other services in regional towns, including trialling community hub stores that will include facilities like changing rooms for residents to try on their online purchases.
![Nationals leader David Littleproud. Picture by Sitthixay Ditthavong Nationals leader David Littleproud. Picture by Sitthixay Ditthavong](/images/transform/v1/crop/frm/pMXRnDj3SUU44AkPpn97sC/7614fea2-58f6-42cf-adac-69eb4957bf4d.jpg/r0_283_5300_3263_w1200_h678_fmax.jpg)
Nationals leader David Littleproud said efforts to modernise Australia Post must seriously consider the needs of rural and regional populations, who rely on the organisation's services much more than their metropolitan counterparts.
He added in areas where there was "market failure", the government needed to consider injecting support to keep those postal services afloat.
"We do it already for things like airlines," he said.
"We have regulated routes where governments support airlines to fly into rural and remote communities, to make sure that there's a connection of the community.
"The government may need to [provide] support in some locations where there is market failure."
Although Australia Post is government-owned, it's completely self funded. At least, for now.
Mr Graham warned that without "meaningful reform", the enterprise would need a government handout in the coming years.
"Now is the time for action, not just supported by our current financial losses, but with the fact that the clock is ticking," he said.
"If we don't get reformed, then our ability to actually turn the corner and become profitable, becomes increasingly difficult."
With additional reporting by Karen Barlow.
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