No Australia Post cross-subsidy: ACCC

30 July 2009

The Australian Competition and Consumer Commission issued its fourth report assessing if Australia Post’s services were being cross subsidised in the 2007-08 financial year.

The report establishes whether Australia Post's competitive services were being cross-subsidised with revenue from services over which the government provides Australia Post with a monopoly. 

"Today's report is consistent with the findings in all of the ACCC's previous reports," ACCC chairman, Graeme Samuel, said.

"Australia Post's logistics services continue to be cross-subsidised, and the source of that cross-subsidy appears to be Australia Post's other competitive services, rather than its monopoly services."

Australia Post notes that while revenue growth for its logistics service has been achieved, it has been insufficient to absorb the significant investment in logistics. Australia Post also cited operational changes and deteriorating economic conditions as factors resulting in the under recovery of revenue for logistics services in 2007-08.

The ACCC uses information provided by Australia Post in accordance with ACCC record keeping rules to assess whether Australia Post’s services are being cross-subsidised.  This cross subsidy report has been issued later than usual to allow the ACCC to more closely scrutinise the procedures used by Australia Post to allocate costs between its services.

This report is independent of the current review by the ACCC of Australia Post's application to increase rates of its monopoly services, including the basic postage stamp rate.

The 2007–08 cross subsidy monitoring report is available from the ACCC's website, www.accc.gov.au.

Links

Release number: 
NR 184/09
Media enquiries: 
Mr Graeme Samuel - 0408 335 555
Ms Lin Enright - (02) 6243 1108