The Australian Competition and Consumer Commission today issued its second report on whether Australia Post is subsidising its competitive activities with revenue from its monopoly activities.
The report analyses the 2005-06 regulatory accounts of Australia Post.
"The results of the analysis are similar to last year," ACCC Chairman, Mr Graeme Samuel, said. "The regulatory accounts do not provide evidence that Australia Post is subsidising its non-reserved services from its reserved services."
Logistics, which is one of the non-reserved services, was again the recipient of a subsidy in 2005-06, but the source of the subsidy appears to be the other non-reserved services, not the reserved services.
This was a result of logistics related infrastructure being under-utilised while Australia Post builds this part of its business.
"In 2005-06, the shortfall in revenue earned compared to the direct cost of providing logistics is less than in 2004-05," Mr Samuel said.
The 2005–06 cross subsidy monitoring report will be available from the ACCC's website.
In addition to its general responsibilities in enforcing the Trade Practices Act 1974, the ACCC has three specific responsibilities in the regulation of postal services:
monitoring for the presence of cross-subsidies between Australia Post's reserved and non-reserved services
assessing proposed price increases of Australia Post's reserved services
inquiring into certain disputes regarding the terms and conditions on which Australia Post supplies its bulk mail services.
To assist it in undertaking these roles, the ACCC can issue 'record keeping rules' to Australia Post, thereby requiring Australia Post to keep the records specified and provide them to the ACCC.
Subsection 50H(2) of the Australian Postal Corporation Act 1989 provides that the ACCC must require Australia Post to keep records about its reserved services. The purpose of this requirement is to enable the ACCC to scrutinise whether or not Australia Post is cross-subsidising from its reserved services to its non-reserved services. However, the ACCC may require Australia Post to keep records that relate to any of its regulatory roles.
The ACCC may prepare and publish reports analysing the information provided to it under the record keeping rules and the Minister may direct the ACCC to prepare and publish reports analysing the information provided to it under the record keeping rules.
Such reports may include information that Australia Post claims is commercial-in-confidence if:
the ACCC is not satisfied that the claim is justified, or
the ACCC considers it in the public interest to publish the information.
To date, one record keeping rule has been issued to Australia Post—in March 2005. It remains open to the ACCC to issue further record keeping rules.
