John Singleton, “Why every post’s a loser,”
The Australian, March 24, 1977, p. 8, in the “Forum” box.

A couple of weeks ago I had a go at the lousy service and lousy profit performance of Australia Post — particularly in the light of their government-given monopoly.

And naturally I got the expected flashes of mail from assorted fools, which I expected; and the most ignorant flash of all from the Post’s Manager of Public Relations, which I didn’t expect, but should have.

Straight out of the Public Service textbooks, my servant B. R. Barry claims I am “ignorant of the economic model of a government statutory enterprise.”

And he is right, in that if Australia Post is a model of anything it is certainly not economics; and if it has ever shown any enterprise then it has certainly escaped my attention.

My servant Barry goes on to say that the reason the Australia Post costs so much to run is because 80 per cent of the costs are for labour, which is exactly my point.

Australia Post has too many people doing too little in between strikes which for the most part pass unnoticed in any event.

Then, out of the blue, Barry tells me that I have “no understanding of the effect of tax on prices”! I can only suppose he says this as a swipe at the fact that I pointed out the Australia Post does dough despite being eligible for none of the taxes that private companies suffer under.

If he means that the letters would cost less if they did pay tax, then my servant Barry understands economics. I am very pleased he considers I don’t.

Imagine any company which didn’t have to pay taxes tomorrow.

Immediately, every company could offer every product and every service for at least half price, and make twice as much profit as well. Without exception servant Barry.

Barry then accuses me of “having no idea of the interactions between Public Service forces” and goes on in best boring style to tell me that our postal rates are no more a rip-off than other countries who share our same governmental diseases.

He even tells me that my idea of opening Australia Post to competition by such people as IPEC, TNT, News Ltd and Consolidated Press is not on because they have strikes too.

And, in fact, just as a closing censure, my servant Barry cites the fact that in the USA the government monopoly mail service loses $250,000 per hour and cops a taxpayers’ subsidy of over $1 BILLION per year. Which is something we can all look forward to.

Now my servant Barry’s letter, as printed in The Australian, all sounded pretty impressive, the way that public servants’ letters always do. Big and important-sounding because it is empty like a drum.

  1. THE reason the Australia Post staff went on strike when it was mentioned that someone was going to look at their efficiency is that they KNOW they are inefficient. That’s why 80 per cent of the exorbitant cost of Australia Post is caused by the inefficiency of their labour.
  2. THE fact that other countries have similar problems is no excuse. All it means is that other countries to which Barry compares Australia Post are equally overgoverned. It does not mean that we should slavishly follow. Rather, it means we should learn from their mistakes, NOT make the same ones.
  3. WHEN servant Barry cites the USA as an example, it would be as well if he had done his homework. Through the 1850s for instance, private enterprise actually did compete with the government services. Nevertheless, an enterprising gentleman by the name of Henry Wells (later Wells Fargo) started a competitive service and in those days charged 5 cents a letter, compared with the Government’s price at the time of 25 cents. Not surprisingly, Wells Fargo and other similar private enterprise carriers took about five minutes to have more than half the total business. Not surprisingly, the Government sprang into typical monopoly action. Using the taxpayers’ money, they cut their prices to one-eighth the previous level and subsidised the huge resultant losses out of bigger taxes. Naturally, what they should have done was let Wells Fargo and their competitors get on with the mails while the Government went about its real role. Even today, in the USA, Independent Postal Services of America are allowed to compete with second, third and fourth class mails. (Not first class, that would be unfair, the Government reckons. To whom?) They have to pay all taxes like every other U.S. company — except government departments — and they offer a better service and they make a profit, while the U.S. Post manages a billion-dollar loss.
  4. WHEN Barry talks about strikes affecting newspapers as well as mail, he misses the point that the newspapers — in many cases — continue their production (e.g. Fairfax last year) and always recover normal distribution next day. The Australia Post on the other hand (because it has no profit motive and no legal competition), doesn’t recover from one strike before the next one is upon us.

Nevertheless, rather than have this debate continue, I should just ask my servant Barry two questions:

  1. IF Australia Post is as efficient as he says, why then will they not allow anyone and everyone to compete with them legally on the basis that simultaneously Australia Post must budget to at least break even?
  2. WHY can’t Australia Post be converted into a public company by being floated on the stock market so it ceases being a drain on all taxpayers whether they use the mails or not?

Of course, if anyone was stupid enough to buy shares, they’d lose the lot when competition was allowed.

Which I suppose is why neither will ever happen.

Enjoy your job, servant Barry, I think it’s pretty secure.