By Andrew Brown in Canberra

AN overhaul of how Australia Post will operate is on the cards, driven by a decline in letter deliveries while parcel services are booming.

The federal government has launched a discussion paper aimed at  modernising the postal service and making it more financially sustainable.

While Australia Post delivered more than 500 million parcels during the past financial year, letter deliveries have been rapidly falling.

Since a peak of addressed letters of 8.5 letters per week in 2007/08, Australian homes now receive just 2.4 letters per week.

The discussion paper said the number is expected to halve again in just the next five years.

“While traditional postal services usage declines, Australians are increasingly relying on Australia Post’s nationwide parcel delivery services, which operate in a highly competitive market,” the discussion paper said.

Communications Minister Michelle Rowland says it is important Australia Post is sustainable because local post offices remain key service providers in many communities.
“Australia Post serves so many communities, particularly in rural and regional Australia,” she told ABC TV.

“In many cases it’s not only the office, it’s the general store, it’s often the only place also providing banking services.

“So the whole point of this consultation is to understand from Australians, and in particular from small businesses and people representing rural and regional Australia, what they need in a modern Australia Post.”

Ms Rowland said while nothing had been decided yet, the changes would be a “productivity driver”.

Earlier this year, the postal service reported a first-half loss of $189 million, with Australia Post set to report its first annual loss since 2015.

Despite the talk of modernisation, the paper said Australia Post would remain in public hands, regardless of the changes made.

Opposition communications spokesman David Coleman said the government needed to ensure none of the 2500 regional and rural communities that rely on post offices would be disadvantaged by any changes.

“The regional network of post offices must be protected at all costs,” he told AAP.

“They’re the centrepiece of many communities and we will fight to protect them.”

Mr Coleman said the minister needed to be transparent about job losses under the restructure.

Opposition Leader Peter Dutton said he understood the difficulties facing Australia Post but the service needed to meet its community obligations.
“People will always have that requirement to send a letter and that’s their right to do so,” he said.

The union representing postal workers warned against watering down services at the expense of community needs and suggested Australia Post be granted a banking licence.

“We also want to see Australia Post secure a banking licence, allowing them to bring back genuine local banking services to communities that are being neglected by the big banks, and to stimulate genuine competition in the sector at a time the public are crying out for it most,” CWU national president Shane Murphy said.

Governments should also take advantage of its vast network and retail footprint to deliver services, rather than leaving the public in long and frustrating telephone queues.

The chief executive of Australia Post told a Senate estimates hearing last month that rules requiring the postal service to deliver letters five days a week should be reviewed in light of falling letter numbers.

Figures showed bills and bank statements made up nearly 98 per cent of letters delivered.

Public consultation on the discussion paper will be open until April 27.