19 November 2013

A new twist on privatisation at New Zealand Post

Finance Minister Bill English said yesterday that New Zealand Post has some "real challenges" from declining mail volumes and is "not really amenable to sell down".

However a new twist in the Government's privatisation programme is in evidence at NZPost. At the same time that NZPost is proclaiming loudly to the world that it will be reducing its postal services, including introducing "every second day" delivery from July 2015, and has already its ceased next-day cross-town delivery service, a private mail company is quietly building up its own business by “cherry picking” the most profitable mail from NZPost.

Freightways subsidiary DX Mail, which has ex National Party cabinet minister Bill Birch on its board of directors, is extending its delivery network throughout the country and offering businesses five days a week next-day delivery for cross-town mail.

While Bill English says the Government will suspend its current asset sales programme after floating Genesis Energy next year, there is one privatisation programme that continues to roll along - the increasing volumes of mail being collected, processed and delivered by DX Mail.

Although NZ Post is not being privatised as a company, its core business is being "cherry picked" by a private mail company not obliged under the Postal Services Act to provide a nationwide mail service.

Because NZPost is required to carry DX Mail’s ‘reject’ unprofitable mail, taxpayers are subsidising a private mail company which is privatising the core business of a state owned enterprise.

NZPost employees may be the only workers in New Zealand compelled by law to actively assist a competitor in putting themselves out of a job.

ENDS

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