Chairwoman, commissioner, ladies and gentlemen, I hope everyone agrees that change is required if An Post is to adapt to the modern business environment.
Changes are needed to change to continue to offer a top class nationwide delivery service to the customer.
By doing so, you can build on your customer base, increase profits and maintain sustainable and worthwhile jobs in the company.
The challenges of liberalisation are happening at a time when people expect the highest quality of customer services and maximum convenience in their increasingly busy lives.
An Post faces many challenges but I believe that management and staff can find the solutions.
An Post is a company working in a global market, which is about to become even more competitive with the promise of full liberalisation in less than two years’ time.
The liberalisation of the postal sector has been with us for over ten years and the reserved area has been gradually reduced over the past number of years.
The directive proposes that it should be removed completely on 1 January 2009.
A study undertaken for the European Commission confirmed that full market opening was achievable in all member states without compromising the Universal Service Obligation.
The report also found that Ireland was above average in terms of readiness for full market opening.
Consequently, the Commission proposes that, subject to political agreement, the postal sector will liberalise in full across the EU on 1 January 2009.
There has been no derogation on email. There has been no derogation on text messages.
A delay in market opening didn’t work for telecommunications and it won’t work for the postal sector.
Putting off the inevitable will not do you, the workers, or the customers any favours. Indeed, it could go against you by further exposing the company to the risks of electronic substitution.
That is why I believe the postal market must fully open on 1 January 2009.
Ireland has adopted a ‘light-touch’ regulatory approach to liberalisation, so as to encourage and optimise the number of postal operators that might wish to enter the market.
On foot of this approach, there are currently 29 firms, including major international players, operating in Ireland with a postal service authorisation from ComReg.
This reflects the change in the market from one dominated by letters to one dominated by parcels and direct mail.
With 80% of mail generated in Ireland now business related, both of these areas are much more open and attractive to competition, especially international competition, than the traditional letters business.
We all agree that Irish consumers deserve a quality of service comparable to that received by consumers anywhere else in Europe.
The protection of the universal service in a liberalised market and ensuring that Irish citizens continue to receive a broad suite of postal services will remain an important policy goal for Ireland.
This is of particular importance if you take into account the country’s urban- rural divide.
One way of ensuring this is to facilitate the development of the postal market.
This will ensure new, competitively priced products and services are available to customers from as wide a range of operators as possible.
I also believe that postal services will benefit from the introduction of postcodes and that it will act as a spur for the development of the market here - and that is before we even consider the wider societal benefits that will follow from their introduction. That is why I am shortly bringing a proposal to Government in this regard.
The Government recognises that An Post is a significant employer and it will be important that the long-term viability of An Post is looked after in the face of open competition.
The necessary measures must be in place to safeguard against big players coming in and ‘cherry picking’ at the expense of the less commercially attractive parts of the country.
Maintaining the status quo and assuming that things can continue as they are, ‘just because An Post has always been here’, is not an option.
Neither is the view that the postal service is a social service and consequently we should rely on state subsidies and protections from the inevitable changes in the marketplace.
They may seem to be superficially attractive, but they are divorced from commercial reality.
The reality is that postal services are an attractive industry for many companies – why else do other companies wish to enter the market?
It is also quite clear that the pace of liberalisation will pick up substantially. And in a fully liberalised, competitive marketplace, companies dependent on subsidies will simply not survive.
An Post must give good employment and a good livelihood to all of its employees, so that they can provide a postal system that focuses on delivering the highest quality service to all of its customers.
This is achievable. We need only look to international companies for evidence of this market-based reform.
Many are similar in size and have faced a significant drop-off in their core letters business.
Their postal systems have undergone major change programmes successfully without subsidy.
To achieve this, An Post must work to transform the company into a modern retail business delivering postal and banking services to local communities throughout Ireland.
The way forward is to ensure that Ireland has, on the one hand, adequate competition and on the other, no diminution of the universal service.
The development of further competition, allied with a modern and customer-focussed An Post, will provide the basis for the further development of the postal sector here.
It is vital that the company is financially fit and capable of meeting these competitive threats head on.
An Post, with its universal reach and brand ubiquity, is in an ideal position to meet the consumers' needs and meet the challenge presented by competition and the threat of new market entrants.
The universal service is your competitive advantage. No other company will be in a position to offer the same levels of service throughout the country as An Post.
Notwithstanding that there are large parts of the country and market segments that could prove to be hugely attractive to competition.
Ireland’s demographics and the 60:40 urban-rural divide, means that it is unlikely an end-to-end competitor to An Post will enter the market.
It is more likely that niche market players will enter the market in the short term.
However, while facilitating competition, we need to protect the viability of An Post and its ability to meet its universal service obligations.
It is important that we safeguard against big players entering the market and ‘cherry picking’ at the expense of the less attractive parts of the country.
A key question will be whether or not this would be through regulation or if it should be left to the market, allowing An Post to come to commercial arrangements with competitors, as is the case with the model used in the Netherlands.
I intend to conduct a public consultation on these matters and those arising from the directive. My Department will also conduct a regulatory impact analysis on the draft directive.
Like you, I am also a realist and over the coming years we can expect competition to increase.
It will come from either the privately-owned express sector, the large European public operators looking for international business or from electronic substitution.
This Government is totally committed to the partnership approach. This is very evident through the national wage agreements and the National Development Plan, which includes local, regional and sectoral plans.
My colleagues and I in Government regard you, the workers, as key stakeholders in this company.
We also believe that there is a shared responsibility between management and staff to make these changes.
As stakeholders you must ensure that the company is focussed on placing the customer at the centre of the company’s operations.
I ask you, the members of the CWU, to work with management to ensure that all the restructuring agreements signed up to are fully implemented and the target savings achieved.
I urge all of you to work with the other stakeholders to position the company to not only take on the competition but also to grow, develop and win new business.
The company can overcome its challenges by implementing positive, practical initiatives will develop the markets and meet customer demands.
This Government will work hard to maintain a strong economy and the short-to-medium term prognosis for the economy is healthy. This can only be good for the growth prospects of the postal service.
I wish you every success in the future.