Australia Post is just ripe for privatization. The largest remaining government enterprise has just posted a record profit.
The main objection to its privatization would be its community obligations but they could be maintain in the terms of sale. Back in June CommSec Securities chief economist Craig James made the case for privatization.
“CommSec believes that there is a solid case to be made for the sale of Australia Post,” the research note said.
“At the very least, the government should begin community discussion on Australia Post’s future.”
Letter volumes were in long-term decline and Australia Post’s business was now centred more on distribution, delivery services, retail operations and financial services in competition with private businesses.
Contrary to the popular belief that its main business is to deliver letters, only 34 per cent of Australia Post’s profits came from letters, CommSec said.
In contrast, 43 per cent of profits came from parcel delivery and logistics.
A sell-off of Australia Post would be the latest in long line of controversial privatisations including Telstra, Qantas and, in the early 1990s, the Commonwealth Bank of Australia itself.
The sticking point over any sale of Australia Post would be its community service obligations, especially for rural and regional areas, the CommSec report noted.
“Widespread community debate can ensure that current essential service obligations are maintained with a privatised Australia Post,” it said.
“While it would have been almost an unthinkable proposition in the 1970s or 1980s to sell Australia Post, now the focus of Australians is on issues such as water security and the environment rather than getting mail delivered to your mailbox on time
The full report from ComSec is here.