Open Letter to The Honourable Malcolm Turnbull, Minister for Communications
Much has been said recently about the plight of Australia Post. 900 jobs have been lost and daily letter delivery threatened to be ceased. But there is more to this story that is being reported by the media or by Australia Post themselves.
Bookshops in Australia have been under much pressure in recent years. The rise of eBooks, changes in consumer spending and a strong local dollar have all contributed to the economic challenges booksellers in Australia have faced and dealt with. Much has been made of the fact that overseas retailers do not have to pay GST but the biggest threat to bookshops and other local retailers is in fact postage costs.
In Australia there is no First Class Mail rate. This has been exploited by many overseas retailers, in particular The Book Depository (an Amazon owned company). With no First Class Mail rate overseas companies are able to post goods under 400 grams to Australia at the cost of a local stamp. The Book Depository has used this to send orders in individual parcels and charge customers in Australia free freight. Under international postal union obligations Australia Post is then forced to deliver overseas parcels at their own cost. These costs have been passed onto Australian businesses and Australian consumers.
Free post coupled with a strong Australian dollar has meant that overseas purchases have skyrocketed. Not only that, but Australia Post’s costs have also gone through the roof. Parcel post costs have dramatically increased which means Australian businesses are in effect subsidising their overseas competitors. And now jobs and services are being cut back. Four years ago Australia Post was one of the most profitable government-owned enterprises. Now it is in dire straits.
It costs in excess of ten times more to post one book from Mosman to Penrith than it does to post the exact same book from the UK to Sydney. This is not only damaging local retailing but it is also crippling an Australian institution. There is a gross imbalance in online retailing. Overseas online retailers do not have to pay GST, fair Australian wages or accurate freight costs. This imbalance is costing jobs, taxes and increasing prices for Australian consumers.
Australia Post does not need to cut jobs or decrease the frequency of delivering mail in order to save costs. If a first class mail rate was established in Australia overseas retailers would not be able to offer free freight to Australia and the volume of overseas post would decrease to more viable levels. This would reduce Australia Post’s costs and save jobs across the Australian economy.
As Federal Communications Minister we call on you to take an active role in ensuring that Australian businesses and consumers are not exploited by overseas companies and unfair loopholes that cost Australian jobs and drive prices up are closed.
President, Australian Booksellers Association
Immediate Past President, Australian Booksellers Association
Chief Executive Officer, Australian Booksellers Association