Wednesday, January 15, 2014

Australia Post: the Vultures are Circling.

[A]

When you read an article like Peter Martin's on Australia Post, you know the decision is already made and the debate is just a formality: people will lose their jobs, and nothing you say will make any difference.

To put it bluntly, the 33,000 Australia Post workers, 10,000 contractors and their respective families will soon be in deep shit, no matter what.

You see, Australia Post's financial position is nothing short of hopeless… Or that's what Martin suggests:
"Delivering mail used to make Australia Post money. It [Australia Post's regulated traditional mail business] now costs $150 million per year. The loss is on track to blow out to $1 billion, and then perhaps $2 billion, far exceeding the profits from delivering parcels and making the entire organisation an albatross around the taxpayers' necks."
As hard as I tried, I couldn't find those "blown out" figures in the 2012 Australia Post Annual Report (PDF), from where Martin supposedly sourced the information. Oh, well. Maybe I was unlucky.

Anyway, the effort wasn't all in vain. While searching for those wayward numbers, I however, did find other figures which Martin never mentioned. Trading revenue, for instance, rose by 2.8% since 2011 (in spite of the fall in mail volume), taking AustPost's after tax profit to $281.2 million (16.6% increase since 2011), of which it paid $213.7 million in dividends to AustPost's owner: the Commonwealth.

Australia Post CEO, Ahmed Fahour: "Overall, we achieved a satisfactory return on equity of 18.7% (up from 13.4% last year)".

Added to the $369.3 million AustPost paid in taxes, AustPost's contribution to the sacred federal budget "bottom line" is $583 million. Not bad for "an albatross around the taxpayers' necks", uh?

Unlike Martin claims, there seems to be little reason to believe the losses on the regulated business will ever wipe out the profits in the non-regulated business: "our non-regulated business returned a strong operating result of $545.6 million with parcels and retail services both performing well".

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The point is, once the decision to throw someone into misery was made, you need only to rationalize it. But you do not rationalize your decision by presenting data against it, so you overlook a whole bunch of figures and see only a $150 million partial loss.

Or, following Martin, you argue that Australia Post workers need to be sacked now, because "by 2050 [in 35 years' time!] there will be just 1.5 [Aussies of working age, for each old-timer or kiddie]". You know, "Australia will need to make good use of every worker it has" and the best way of achieving that in the future is making workers redundant in the present.

Makes sense, right?

Credit Image:
[A] Raptor Watch. link

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