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Will Australia Post apologise to Christine Holgate?

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A damning 255 page report has slammed the board of Australia Post and found that Christine Holgate did not breach any policies. We know from the small businesses that operate licensed post offices that Christine Holgate was well respected and had a reputation for actually getting problems fixed. I questioned Australia Post at Senate Estimates.

Transcript

[Malcolm Roberts] Disappointing to note that the CEO of Australia Post, the former CEO of Australia Post, Christine Holgate, has taken up a new role rather than pursuing a return to work in Australia Post. I’ll explain more about why it’s disappointing in a minute. In denying Ms. Holgate “her legal principles of procedural fairness and natural justice,” can Australia Post employees, licensees, and customers expect the same treatment as she got?

Senator, I’d prefer not to comment on matters dealing with the board and that have been very well dealt with, with the inquiry and the 255 page reading that we’ve received yesterday. But I think those matters should be kept entirely separate from the matters that happen on a day to day basis at Australia Post. I think that they’re very different matters-

[Malcolm Roberts] I can imagine you-

Those matters have been well covered.

[Malcolm Roberts] I can imagine you are advocating that, but the description of your board chairman’s behaviour in giving evidence to both Senate estimates and committee’s subsequent inquiry has shown him to, at best, have an appalling memory, and, at worst, at being deliberately evasive and misleading. I’ll just relate a personal example, personal interactions with the LPOs, because this issue about what happened to Christine Holgate goes well beyond Ms. Holgate. It goes to the goes to Australia Post. The ministers have done enormous damage, I believe, to Australia Post and to the LPOs. Now I’ve been pursuing issues for the LPOs strongly and vigorously. We’ve gone out into the regions and we’ve listened to people in the city LPOs, and they have told us, for years, that their needs have not been met. They’ve not been listened to. They’ve been abused. They’ve been trod on. So prior to Ms. Holgate becoming the CEO, that’s the way the LPOs are treated. And what stunned me, was the LPOs is just swung straight in behind Ms. Holgate. Very, very strongly behind her. And they said that, she actually told me later, that due to my questions in Senate estimates, she said, “There’s a problem here.” And she went out and listened. And the LPOs were very, very grateful for that. And they swung in right behind her. Angela Cramp from the LPOs, very strong advocate. The LPO is we’re writing letters to us, saying how much they appreciate Ms. Holgate. They’ve never had that kind of support and now they’ve lost it. And the way she’s been dismissed has left a lot of people wondering what’s going on in Australia Post. That’s why it’s so important.

Senator, if I could try and separate those issues and matters that have been dealt with well by the inquiry in the former CEO. But I could give you my, having grown up on a farm myself, and coming from regional Western Australia, and joining Australia Post because of its far reach into regional and rural Australia, I appreciate, as does Ms. Sheffield, who looks after community and consumers and all of the LPOs, how important the LPOs are to Australia Post. We are absolutely committed to the LPOs. And as Ms. Sheffield said, the first round of payment reform was what 55 million increase in additional payments. So there is a significant amount of support within Australia Post here at this desk today and back in the offices right across Australia Post. So, we do appreciate everything the LPOs do. They’re a very important part of the Australia Post. And will be for a long time to come out, I hope.

[Malcolm Roberts] But we’ll be assessing it by listening to the LPOs, as to what happens, because they are Australia Post in many communities. And they’re the community, they’re the heart of many communities. So-

Senator, and just take that on board. When I sat down with the chair of the Australia Post Advisory eh-

[Ms. Sheffield] APLAC.

APLAC. I always get the acronym wrong. Outside his LPO and discussed matters, and we are listening to LPOs every day. It’s very important.

[Malcolm Roberts] Well, I just had a text message from Angela Cramp. And she’s saying, “He has had no contact with LPOs since he took over the role. He’s not responded to anyone.”

From Ms. Cramp-

[Malcolm Roberts] To me.

Directed at me?

[Malcolm Roberts] Yes.

I haven’t had direct contact with Ms. Cramp. As I said, I sat down with the chairman of APLAC, and I’m out in post offices, corporate and LPOs alike. So, as Ms. Sheffield, on a regular basis.

[Malcolm Roberts] We hope it doesn’t go back to the way it was pre-Holgate.

Can I also add to that, Senator? We have worked very hard to build those relationships with licensees. We understand and value licensees incredibly. This week, we had an APLAC board where we brought everyone together, which Angela Cramp is a National Director on. We, you know, we’ve just finished six weeks of road shows, where all licensees were invited to the communities and we will be coming, well hopefully, COVID permitting, in Woolongong next week for, you know, to ensure that we hear from our licensees because we agree with you. We have to listen. There is a lot of change happening in our community. There’s a lot of change to their business, and there’s a lot of change that needs to be there to support them. And whether it’s in looking at what products they’re offering, outlets, payments, lots of consultation, and we really do value the input that they have, in both associations, both LPOG and POALL provide a lot of input and provide, not just to myself, but to teams of people at Australia Post that really are there to do the best. And we don’t want anything to go back. It won’t go back. This payment reform is written. It’s an agreement. It is there to stay, and the next phase will be an agreement. So, really it is, it is there to really support them and help them to grow. Because we know when LPOs thrive, Australia Post thrives. And that’s why we created the payment reforms so that they’re not, it’s not a cost, it’s actually a cost of sale. It’s based on growth. So as e-commerce grows, they grow, because they get a greater share of parcel revenue, which they never got before. So the whole basis of how that set up, actually, is there to drive their growth and ensure that their businesses grow.

[Malcolm Roberts] Right. And as you said, it didn’t happen before. Thanks to Ms. Holgate, it has happened. So we’ll be watching very, very closely because we don’t want to see it go back to the previous days. Will you be implementing Senator Pauline Hanson’s recommendations as part of the committee’s recommendation and report that came down yesterday that the Australia Post chair, Mr. Lucio Di Bartolomeo, be removed from the board, given the scathing conclusions and comments about his behaviour?

Senator, thank you very much for that question. I don’t think it’s the responsibility of the acting group chief executive to comment on the chair. The chair has put a statement out yesterday afternoon saying he’s committed to continuing to lead Australia Post. So, but it’s not for the acting management, and as acting CEO to comment on, on that.

[Malcolm Roberts] I’ve had other questions on services so I’ll put them on notice.

That’d be great.

[Malcolm Roberts] Thank you very much.

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Does Australia Post care about Mum and Dad LPOs?

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Licensed Post Offices (LPOs) provide important services especially in regional towns. Unfortunately, they’ve been overlooked in a number of the changes to the way Australia Post operates.

Transcript

[Malcolm Roberts]

Thank you chair. And thank you all for attending today. Is Australia Post considering selling off its profitable parcel post business? And please advise what discussions, reviews and planning has and will occur in relation to the parcel post business?

Senator, that would be a matter for government. So we’ll have to defer to…

[Lucio Di Bartolomeo]

If I could just respond from the chair’s and board’s perspective. There has been no discussion, no plans, no undertakings to prioritise any aspects of Australia Post business. Certainly in the time that I’ve been there. And while we’re on that time, Can I correct the figure that I gave earlier? I was appointed on the 22nd of November not the 14th of November.

[Woman]

Thank you.

[Lucio Di Bartolomeo]

The 14th was the date that the press release was put out. I apologise for that.

[Malcolm Roberts]

So you can rule out that there’ll be a sale of the parcel post?

[Lucio Di Bartolomeo]

Correct. Correct.

I mean, I…

[Woman]

So can I.

[Malcolm Roberts]

Thank you.

Does Australia Post consider it has a responsibility to provide a possible, a profitable business model for licensees of community post offices?

[Lucio Di Bartolomeo]

We certainly believe we have a responsibility to maintain viable partners in all the business that we undertake. Both at the contractor level and at the LPO level, yes.

[Malcolm Roberts]

So you will look at their services through their eyes.

[Lucio Di Bartolomeo]

Absolutely.

[Malcolm Roberts]

The chair of Australia Post commissioned a review by the Boston Consulting Group to inform the board and the CEO. Why were the most heavily invested stakeholder group, the licensees, not engaged and or included in the sharing of the outcomes, recommendations for that review.

[Lucio Di Bartolomeo]

Senator, if I could just correct one point. The Australia Post board did not engage BCG. This was an independent investigation by our shareholders, shareholder ministers and we supported the investigation. But we did not engage nor ultimately conclude any position on that review.

[Malcolm Roberts]

From whom do I request to get a copy? Because it’s been out since I guess… Sorry.

[Woman]

We’ve already taken public interest immunity on that report, Senator Roberts. The cabinet’s explicitly considered the executive summary of their BCG report. The full report though, as a usual practise, was also available to cabinet and I consider by a number of ministers. But the report’s expected to be given further cabinet consideration in the context of ensuring that Australia Post has a sustainable future.

[Malcolm Roberts]

Could you please advise the status and next steps being taken by Australia Post with licenced post offices, LPOs, to progress payment reforms.

[Lucio Di Bartolomeo]

Senator, thank you very much for the question. I may just defer to Ms. Sheffield, who heads up our community and consumer area and ask her to come to the desk. And outline we are about to kick off on the payment review process . So, Ms. Sheffield.

[Nicole Sheffield]

Thank you Mr. Boys. Thank you, Senator. Nicole Sheffield executive general manager, community and consumer. Thank you Senator for that question. We work very closely with our licensees, our licensee partners and associations. The payment reform itself, we have had one consultation with LPOG. And we have a first consultation with POAAL, the other group later this week. Once we understand the principles and agree what are the areas that we will be looking at, then we we’ll make for some recommendations. And start working that including, as per the first lot of payment reform, looking at those payments per outlet. Because when you have so many outlets, 2,580, there are a lot of impacts. So when you make any changes to payments there’s going to be some impacts that we want to make sure that we understand across the entire network. So that requires a lot of modelling, a lot of consultation. As you know, the first payment reform was very successful and introduced $50 million worth of extra payments in the last two years to licensees. And that was all about ensuring that they were paid for parcels and for scanning. The second lot of payment reform is going to focus on community representation, and the very important role that they play in that. But also looking at our identity services and financial services. I feel very confident that before the end of this financial year we should have some really good parameters to move forward.

[Malcolm Roberts]

So it has a budget. Thank you for that. And it’ll save me, giving my preamble for the next question. Has a budget allocation been made for phase two reform implementation, which we understand is expected to begin shortly. And what is the budget allocation for phase two? When do you anticipate it will be commenced and then implemented?

[Nicole Sheffield]

So budgets at the moment have not been concluded for next financial year. So we’re in the process of discussing within the organisation, all of that. But I can tell you confidently Senator, there will be budget allocation. We’ve been discussing this and just like anything we will put aside the required amounts. And that’s part of the reason we’ve started the discussion so early this year to make sure that we allocate the appropriate amount.

[Malcolm Roberts]

And that would come with extensive consultation with the LPOs?

[Nicole Sheffield]

Absolutely.

[Malcolm Roberts]

Okay. In order to achieve sustainability for LPOs, does the significant change in volume between letters and parcel post require a review of the financial relationship between licence, with licenced post offices. Especially if, yeah, that’s all I need to say.

[Nicole Sheffield]

Yeah. Look, we’re always ensuring the viability of our licenced post office partners. We know how important they are for us to deliver our community service obligation. But actually they’re, you know, the face to our community to regional and rural Australia. Their viability is critical. And just as we’ve seen, COVID has created an e-commerce boom that none of us expected. We hoped, but none of us expected that it’s changed the financial model completely for our post offices. Because all of a sudden their revenue drivers are significantly more coming from parcels than we’ve ever seen. And so it really is constantly working with them looking at what products, services they are offering to their communities. What arrangements that we have, what opportunities we can have to introduce new products and services that will drive transactions and foot traffic for them. And I think it’s something that we’ll just constantly need to be looking at and working with them to look at what we can do to grow.

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