By nature I am an optimist …you have to be in politics! I prefer to refer to challenges rather than problems. I like people who work with me to bring three solutions for every problem they see…It’s amazing how few problems arise then! On that basis, I want to give you three solutions to the problem that faces us today- you as postmasters and postmistresses, An Post as a company and me as Minister.
The challenge is fairly straightforward. An Post is a company working in a global and increasingly competitive market- a market which is about to become even more competitive with the prospect of full liberalisation in three to four years. This is happening at a time when people expect very high quality customer services and maximum convenience in their increasingly busy lives. These are customers who are much better informed, much more mobile, physically and through ICT and they rightly demand only the best in terms of service.
So what are the solutions? One solution is to maintain the status quo, bury our heads in the sand and assume
- that because everybody needs a postal service
- that there will always be an An Post and a political imperative to provide it and
- that things can continue as they are.
A second is to see the postal service as a social service. In looking at it as a social service we demand that it should be subsidised, propped up and protected from the inevitable changes in the marketplace – changes that will accelerate in the future.
The difficulty with both of these solutions is that they do not address reality. The reality is that within a few short years all postal services will be liberalised. Already 60% of the postal services in Europe are owned by four major companies. What is quite clear is that the pace of liberalisation will pick up substantially, a reality from which we cannot be shielded.
If we want to try to predict what could happen in a liberalised postal market, look at what happened when the parcels element of the postal services was liberalised. An Post went from having a 100% monopoly to have a 25% share of market. In a fully liberalised competitive marketplace companies dependent on subsidies will simply not survive.
So what’s the third solution?
- It’s a profitable and efficient An Post
- It’s a postal system that gives good quality service to all its customers, business and private,
- It’s a company that gives good employment and a good livelihood to all those employed directly or as contractors.
That’s not a wish list, it is possible. An Post did all these things in the 1990s. It underwent major change, the quality of its service improved immeasurably. It didn’t increase its prices for 8 years and it went from reported losses to profits. It didn’t require any state subsidy and it funded its own capital needs.
An efficient, profitable postal service that offers rewarding jobs didn’t just happen once for a short period of time in Ireland, it’s the way things are at the moment in a number of countries, including New Zealand and Denmark for example. I highlight both of these countries because they are similar to Ireland in terms of size, demographics and economies. Their postal systems have undergone major change programmes successfully.
Its always tempting when comparing Ireland to best international practice to assume that the other models are experiencing quiet different market conditions, but that’s not the case. Both New Zealand and Denmark, like Ireland, have suffered a decline in their core letter business. Nonetheless, they remain profitable. They have contrived to be profitable, all on their own, without subsidy and without special pleading.
How do we achieve here what others have achieved elsewhere? Is it possible? I believe it is possible. To achieve that we have to transform An Post into a modern retail business delivering postal and banking services to local communities throughout Ireland. It can do this by providing its own financial products and services and by acting as an agent for other major financial institutions.
An Post can easily become commercially strong and viable because it has huge advantages:
- Extensive nationwide retail network unmatched by anybody else,
- It has a brand name that is known and trusted throughout the country,
- Its premises have a high foot fall,
- It has the capacity for delivering more Government services.
An Post, in partnership with the IPU, has had some success in developing new services. I was particularly struck by the flagship contract with Allied Irish Banks, which is good news for An Post and AIB and is used enthusiastically by the customers of both organisations.
The fact that you have delivered on the AIB contract demonstrates that An Post is well placed to win new business from both the public and private sectors. And I am glad to see we have already seen further new arrangements entered into for additional bill paying facilities at post offices.
In addition to their business function, post offices have an important social role because they are a point of human contact for local people. Post offices are also a point of contact between the State and its citizens, even in the remotest areas. I believe that that link should not only be maintained but strengthened.
This Government, and I personally am totally committed to ensuring that Government and State agencies do business through the post offices. 74% of post office business comes from Government and State Agencies. ESB has 800,000 payments through the post offices, Dublin City Council sells their bin tags through the post office and from this year, Garda fines will be payable through the post office network, these are good earners for An Post and the Postmasters and is fertile ground for getting new utility business. Because post offices are seen as so important to local communities in rural areas I am often puzzled why local councils don’t use the network more to deliver their services?
The fundamental changes to An Post that I outlined earlier will require flexibility and adaptability on all sides. It will mean the introduction of new technologies, new work practices and new ways of doing business. You are a critical component of achieving this change.
I recognise that the change to a retail post and bank business is only one aspect of the change that needs to take place in order to ensure that An Post becomes an efficient and effective company in a competitive market, but it is the one most relevant to our deliberations here today. Flexibility and adaptability have to be key features of the other changes which have to be made in other aspects of An Post business.
I want to turn to a topic of more immediate concern, namely social welfare payments. The record of delivery of social welfare benefits to our citizens is something that An Post, together with its postmasters and postmistresses, can regard with pride. Generations of Irish people have used their local post office to receive their benefits and we simply could not have established the social welfare system, as we know it, without this crucial input from our post offices.
I want to reiterate my view and that of my colleague, Minister Seamus Brennan that we want to see An Post delivering social welfare payments to the maximum number of people. Quality customer services, however, means that people must be allowed to choose their preferred method of payment. Increasing numbers are choosing alternatives to the post office because of the convenience of electronic funds transfer. Over 65% of new social welfare recipients opted for such payments. Some of that may be due to promotion by the Department but most is a result of customer choice.
As you know, EFT is not currently an option in post offices, but it needs to become an option quickly. For that reason, in recent meetings with Minister Seamus Brennan, we have agreed that all social welfare payment options will receive equal standing on social welfare application forms and for the time being the Department of Family and Social Affairs will not actively promote alternatives to the post office system of payment.
Minister Brennan and I, and our officials, jointly met with An Post recently and it was agreed that:
- An Post would move to an EFT payment system as quickly as possible
- 20 non-automated post offices would be automated this year and
- An Post and Department of Family and Social Affairs will liase closely on the technology issues, which need to be addressed to provide EFT in the shortest timeframe possible
- An Post has agreed to look at the seven day notice period for post office savings accounts to see if it could be altered to make savings accounts more attractive for social welfare recipients.
Fianna Fáil and this Government are committed to a strong viable An Post. A strong viable An Post is the best guarantee you as postmasters and postmistresses can have for the future. That future lies in resolving the current IR difficulties in the postal delivery service, in expanding the range and type of service being provided and in all of the stakeholders approaching the necessary changes in an open and flexible manner.
Thank you
ENDS