New Zealand Post seeks flexibility for the future

29 January 2013

29 January 2013

New Zealand Post seeks flexibility for the future

New Zealand Post has welcomed the release of its proposal and discussion document regarding postal services for public submissions.

The document has been released by Communications and Information Technology Minister Amy Adams and is available on the Ministry of Business, Innovation and Employment (MBIE) website www.mbie.govt.nz (click on the „Have Your Say link).

The document contains New Zealand Posts proposal to update the Deed of Understanding (“the Deed”) it has with the Government regarding standard letter delivery and postal outlet services.

The current Deed was last significantly updated in 1998, some 14 years ago, at a time which pre-dated the digital revolution. That revolution has resulted in the rapid expansion of internet-based products and services which have fundamentally changed the way people communicate, do business and shop.

The last decade has seen an unprecedented drop in mail volumes. There was 24 percent less mail (265 million fewer items) posted in 2012 than a decade before in 2002. Within five years mail volumes are forecast to decline further, to just over 600 million items – in other words, just 50 percent of the mail volume in 2002.

New Zealand Post Group CEO Brian Roche says the current Deed no longer reflects the current use of New Zealand Posts services, or the impact technology has made as a substitute. Mr Roche says the Deed is in urgent need of a revamp to ensure New Zealanders continue to have access to a sustainable, viable, postal service network that meets their changing requirements.

“The time is now to make the necessary decisions for the future. Every postal system around the world is facing similar challenges and they are beginning to act. We cannot stand still and simply hope the problems will go away.

“We are seeking an agreement that gives us the flexibility and certainty to be able to plan for that future. Without that flexibility, standard letter mail and postal outlet services will incur significant losses.

“Not gaining flexibility will leave us with some challenging and unsustainable options – asking for taxpayer funded subsidies to prop up the letters business; operating the postal business at a loss which will degrade the business over time; or cross-subsidising from other parts of New Zealand Post, denying the business the opportunity to grow and invest.

“The document released today clearly outlines the rationale for change and what we need to do to ensure our letters business has a future. We have exhausted the short term fixes the 1998 Deed allows,” Mr Roche said.

He said New Zealand Post has engaged with key stakeholders including business, the rural sector and groups representing older New Zealanders about the future of postal services, and will continue to do so.

“The public submission process over the next six weeks will further inform the decision on the final nature of the agreement with the Government.

“We believe the agreement should focus on ensuring customers can access services, not on requiring services to be provided in a particular way as the current 1998 Deed prescribes,” he said.

Mr Roche emphasised the proposed new Deed was not a business plan, but rather the framework which would provide the parameters for those plans to be created, and implemented over time.

“We are not about to reduce letter mail delivery frequency immediately. It is, however, inevitable at some point in the future that there the need to reduce standard letter mail delivery frequency.

“Getting flexibility now will ensure we can plan clearly, and inform consumers, the business sector and other key stakeholders well in advance of any changes.

“We understand that these proposed changes will, over time, impact on our customers, users and employees. However the influence of technology will continue and may well accelerate. It will not, in our view, go away, and nor will the challenges we face. Hence, our proposal is to manage these challenges proactively, so we can maintain a viable and dependable network,” Brian Roche said.

The New Zealand Post discussion document and details of how to make submissions can be viewed at the MBIE website www.mbie.govt.nz.

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