Post offices at risk of closure due to government indecision over Australia Post corporate plan, operators say

Updated

There are fears the Federal Government's indecision could lead to the closure of more than half of the nation's licensed post offices.

Australia Post urged the Government last week to immediately approve its corporate plan, which includes the politically sensitive suggestion of raising the price of standard stamps.

The ABC has learned that decision will not be made before Christmas.

Angela Cramp from the Licensed Post Offices Group said she received the news with "utter disbelief and horror".

Ms Cramp said there were 2,900 licensed post offices in Australia and that many of them were in financial strife because they were unable to cover costs.

She said they were hoping for the corporate plan to be approved so they could charge more for stamps and other services.

"I mean we have been fending off a crisis for the last 12 months," Ms Cramp said.

She said the delay would have major ramifications for the majority of cash-strapped licensed operations throughout Australia.

"I have serious concerns about at least half, if not more," she said.

Ms Cramp said she feared franchisees would be facing a delay of up to 12 months.

"A significant number will need to look seriously at whether they stop now," she said.

"How long can they keep going?

"How much money can they put into these businesses before there's no hope of lasting until there's a remedy."

Communication Workers Union spokeswoman Joan Doyle said the delay was good news for consumers.

"We're totally opposed to the corporate plan, which is basically the chief executive of Australia Post trying to charge more money and provide less service," Ms Doyle said.

Chance of credit downgrade hangs over company

The delay comes within days of Australia Post revealing last week at Senate Estimates that it faced a possible credit rating downgrade.

The organisation is already shedding 900 staff after a significant drop in revenue due to fewer letters being sent.

Australia Post managing director Ahmed Fahour told the committee Standard and Poor's had indicated the credit rating could be downgraded by up to three points within the next month.

"If they were to do that and go all the way, this has really serious implications to be downgraded as a public company," Mr Fahour said.

"I mean we're owned by the Government of Australia which is triple-A and we're heading towards a much lower credit rating which means our borrowing capacity gets harder, we have a higher interest repayment."

Mr Fahour told the committee Australia Post needed the corporate plan approved quickly before the credit rating was downgraded.

"This need for urgent reform ... I don't want to use emotive words like desperate, but the clock is ticking really fast on our employees, on us and our licensees," Mr Fahour said.

"This is really serious."

Standard and Poor's is yet to make a decision on the credit rating downgrade.

Australia Post's only response to the delay in the Government's decision about its corporate plan was to refer the ABC to the Government for comment.

The ABC has contacted Communications Minister Malcolm Turnbull for comment.

Topics: federal-government, information-and-communication, company-news, government-and-politics, australia

First posted