After a 4 year fight, the Australian conservative government has been forced to abandon its plans to almost fully deregulate the Australian postal market. This reversal is a direct result of the massive and extensive community campaign run by the union of Australia's postal workers, the CEPU, under its Hands Off Aussie Post campaign banner.

Brian Baulk, the CEPU Divisional Secretary and UNI Asia Pacific Postal President, stated that the CEPU and its members and campaign coordinators can be congratulated on bringing about the defeat of this legislation:
"The withdrawal of this legislation represents a major setback for the forces supporting deregulation and privatization in Australia and overseas. In withdrawing its legislation, the Howard government has completely failed in its plan to introduce postal deregulation."

As if to confirm the effective campaign of the CEPU and its members against this postal deregulation plan, the conservative Minister responsible for postal matters, Senator Richard Alston, publicly declared that the government had abandoned its plan because of the union's campaign. In his words, the CEPU had exercised "the union veto" over the government's plan. They had failed due to our efforts.

The CEPU had mounted its campaign almost 4 years ago in response to the new Australian conservative government declaring its intention to deregulation the Australian postal service. This deregulation push and the CEPU fight against it is merely an Australian element of the world-wide push for postal deregulation. The CEPU victory is a victory for all postal workers, their unions and the UNI.

Australian Postal Regulatory Framework - The Background to Deregulation

Since 1989 Australia Post has been a corporatised, government business enterprise. It operates under legislation and a government appointed board and has commercial objectives supported by its community service obligations. Australia Post receives no funding from government and has consistently returned significant profits in recent years. This is in no small part due to the record productivity improvements achieved by CEPU members, with the cumulative total over the last 9 years double the national industrial average.

Currently the Australian postal service is regulated by national legislation which specifically reserves a portion of the postal market for the national public sector postal organization, the Australian Postal Corporation or Australia Post.

This reserves to Australia Post the incoming international mail and the "standard letter" market, defined as letter weighing up to 250 gms. Competitors who wish to offer mail services to this portion of the market are required to charge no less than 4 times the Australia Post rate (currently 45 cents). All other sections of the postal market in Australia (such as mail over 250 gms, parcels, courier services, financial transactions and stationery provisions) are open to full competition. This reserved service is worth approximately 50% of Australia Post's current revenue or $AUD 1.7 million per annum.

This reservation is made to ensure that Australia Post has sufficient financial resources to fund its legislated community service obligation (CSO). This is to provide uniform and affordable access to the standard letter service. This universal service obligation translates as a requirement to provide a mail delivery service throughout Australia for mail weighing up to 250 gms at a uniform standard rate, currently 45 cents. Attachment 1 provides an extract from this CSO.

It is pointed out that the current regulatory and operational situation of Australia Post is the result of major government reviews in recent years. The most significant of these was the establishment of Australia Post in 1975 (separation of the PMG from telecommunications services), the introduction of corporatisation n 1989, the reduction of the reserved service from 500 to 250 gms (and 10 times to 4 times price protection) as well as the removal from the reservation of document exchange services, internal mail transfers and international out-going mail in 1994. Attachments 2 and 3 outline these key regulatory milestones and provide detail on some of the recent regulatory proposals and changes.

Recent years have also seen the community service obligations of Australia Post strengthened to some extent. Following a parliamentary review in 1996 (referred to as the Vaile Report) which recommended among other measures the expansion of the existing CSO's to encompass post office numbers and the provision of financial services, Australia Post and the Coalition government established a range of performance standards to be met as part of a new Australia Post Service Charter. This included on-time delivery standards and post office outlet and posting boxes minimum standards.

However these new standards were to be met as a commitment by Australia Post to government rather than a legally binding standard set by legislation and reported to the Parliament, as is the case regarding the CSO. It should be noted that the Coalition government released the new Service Charter a matter of days prior to the release of its deregulation plan in July 1998.

The Postal Deregulation Push Begins

While Australia Post has been subject to gradual deregulation of its market (including under the Hawke and Keating Labor governments in 1983-96), the election of the new Howard conservative Coalition government in 1996 has subjected Australia Post, the CEPU and its members as well as the wider community to the most radical postal deregulation plan ever attempted in Australia.

It needs to be stressed that the push for postal deregulation by this government is in the context of its overall and sustained neo-liberal agenda. This government has fought for the full privatization of Telstra (the national telecommunications provider) and has succeeded to achieve a 49% sell off. They have undermined the existing collective rights of workers by seeking to undermine the role of trade unions in industrial relations as well as the reducing the role of the independent industrial umpire in Australia, the Australian Industrial Relations Commission (or AIRC). In addition, the Prime Minister, John Howard, holds the CEPU and its members in particular contempt, even going to the extent of endorsing (subsequently unsuccessful) conservative candidates in previous internal union elections. All of this meant that the CEPU knew we would have a fight on our hands to defeat postal deregulation.

In its almost 4 year attempt to introduce postal deregulation, this government has used all sorts of subterfuge to hoodwink the Australian public.

Firstly, the government commenced its deregulation push by establishing an "independent" review of the postal regulations. This was conducted by a public service body (known as the National Competition Council or NCC) between mid 1997 and February 1998. This body is chartered with recommending opportunities for deregulation and full competition to the government, much like the role of the WTO and World Bank at the international level. The NCC's new postal review was directed to identify opportunities for further competition in the postal market, although full privatization of Australia Post was exempted from its considerations.

This review was extremely controlled, with limited opportunities for public involvement. While the CEPU ensured that our substantial anti-deregulation message was formally put to the review, the CEPU was not surprised when the final report was released. Along with a range of other regulatory changes, the key recommendations of this review were the full deregulation of all business and in-coming international mail, the new regime to be introduced by January 2000. If that wasn't enough, a further review of the reserved service was recommended for 2005.

Australia Post estimated that this would have increased competition in postal services from 50% of Australia Post's current revenue to 93%. Indeed Australia Post senior management felt compelled to public attack the NCC report recommendations, stating that they:

"would have substantial financial impacts ... (and) goes further and faster than we believe is practical with no safeguard review of the impacts to ensure that any unintended consequences of reform are avoided."

Clearly, the government's plan was in trouble.

Hands Off Aussie Post campaign

While the CEPU had commenced its anti-deregulation campaign - under the banner of the Hands Off Aussie Post campaign - in 1997, the release of the NCC review report was a major milestone in our campaign. On the basis of our assessment of the impact of these changes, the CEPU argued that a 43% increase in deregulation would have drastic effects on Australia Post's revenue and services. The survival of up to 19,000 postal workers' jobs and nearly 2,000 post offices would be threatened. Service standards would be reduced or abolished altogether, with particular impacts on less profitable rural and regional areas of the postal market.

The CEPU's campaign sought to mobilize community and political support in opposition to postal deregulation. We sought to inform the community and politicians of the impacts of these measures and show that how they could be stopped. We lobbied the major opposition parties to gain their support, with Labor in particular backing our campaign. We publicized the work of the NCC and encouraged community submissions. We wrote to all major community organizations (and especially traditionally conservative rural and regional groups) urging their support. We sought to generate media and public interest through our innovative Hands Off Aussie Post campaign traveling roadshows, with our specially decorated ex-postal delivery vans, sound systems and "dancing post boxes". These roadshows toured throughout the length and breadth of Australia, taking our message to rural and regional community and generating a massive amount of supportive media coverage. This was all backed by our coordinated media strategy, with all designated CEPU state campaign coordinators fully informed of the latest developments, up-to-date comment advice and measures to ensure rapid response and to keep us "on-message". Above all, our campaign was planned in a strategic and professional manner, with a dedicated national and local campaign structure to ensure effective implementation.

The effect of this was that we gained almost 70,000 signatures on our national community petition and overwhelming media coverage that beat the government's media effort. A survey of the media coverage on this issue during the height of the campaign revealed that the CEPU campaign gained 74% supportive coverage compare to only 19% in favour of the government's position. The effect on the government of our campaign was evidenced in their unsuccessful legal attempts to have our campaign advertising withdrawn and their attacking us by mimicking our campaign theme song - "Wait a minute, Mr. Postman!

However, the immediate focus of our effort was to call on the government to abandon its NCC report and its recommendations.

Government Changes Tack

As a consequence of our campaign, the conservative government had to change tack on its deregulation push. The government sought to distance itself from its own report. It did this by formally announcing that it had rejected its key recommendations and proposing its own "more moderate" plan. Yet this was only a propaganda smokescreen. While they had rejected the immediate deregulation of all business mail, the government proposed an across the board reduction in the reserved service from 250 grams and four times to 50 grams and merely no less than the price of the standard letter. The package also endorsed the NCC recommendation to deregulate all incoming international mail, changes to mail aggregation arrangements (lowering the threshold from 2,500 to 300 items), bigger discounts for bulk mailers and a "liberal" access regime. Australia Post assessed the impact of these changes as increasing full competition in Australia Post's revenue from 50% to 88%. This represented a marginal reduction from the NCC's 93% competition recommendation. These changes were to be introduced by 1 July 2001.

As far as the CEPU was concerned this new proposal hardly differed from the original proposals of the NCC. The deregulation of 88% of Australia Post's revenue base - or exposing a further $1 billion of revenue to full competition - would be a disaster for Australia Post, our members and the public. In the CEPU's estimation, the changes would still result in job losses (up to 17,000) and post office closures (up to 1,700). It would lead to similar service reductions and price increases the CEPU estimated to flow from the NCC recommendations. The financial pressure on Australia Post would be such that it would have to examine all avenues of cost reduction. This is where the loopholes in the government's postal Services Charter would come into play. The guarantees contained in this charter were extremely limited and could allow Australia Post to close post offices, reduce or abandon a whole range of existing service and increase charges. Again, the main victims of these cuts would rural and regional postal users.

Postal Deregulation and the 1998 Federal Election

The CEPU's Hands Off Aussie Post campaign now targeted the government in the run up to the October 1998 national Federal Election. Having announced its postal deregulation proposals, the conservative government was now formally adopting a postal deregulation agenda. While we had succeeded in gaining the formal rejection of the NCC report, the government's concessions were insufficient. They were clearly committed to postal deregulation. In addition, the government formally rejected our direct appeals to abandon its plans.

For this phase of our campaign, the CEPU effectively mobilized parliamentary and community opposition to the government's proposals. The aim was to maximize opposition to the proposals in the Senate (the upper chamber of the national parliament in which the government did not have a majority) and to assist in the possible defeat of the government by targeting and campaigning directly in 13 key electorates.

The CEPU campaign was comprehensive, encompassing a national mailout to all CEPU members, television and press advertisements, election leaflets, polling booth signage or advertising and a range of other materials and activities. Our "traveling roadshow" swung into action again, targeting the government's marginal electorates. Our successful lobbying of the major opposition political parties - Labor, the Australian Democrats and Greens (both of the latter being minor opposition parties with strategic representation in the Senate) - came to fruition during the Federal election, with both these parties declaring their opposition to the government postal agenda and their support for the CEPU position.

While the government was unfortunately re-elected (despite gaining less than 50% of the national vote), the CEPU campaign had successfully damaged the government. 8 of the 13 government MP's targeted by the CEPU were defeated at the poll and replaced by Labor MP's. The support of all parties opposed to postal deregulation rose to 56% of the vote, undermining the government's claim to a future mandate on postal deregulation. Most importantly, our campaign ensured that postal deregulation was a major election issue, with a clear policy divide between the government and Labor, the Australian Democrats and the Greens.

The Re-Newed Government Push for Postal Deregulation

Despite these major political setbacks, the re-elected conservative government continued with its intention to introduce its postal deregulation agenda by putting the required legislative changes to the Federal Parliament. As the magnitude of the government's changes required changes to the regulatory regime governing Australia Post and its operations, new legislation was required.

As a result the Postal Service Legislation Amendment Bill 2000 was introduced into the Australian Parliament in April 2000 This Bill effectively sought to implement the government's response to the NCC report recommendations. It had two major provisions - giving effect to the reduction in the reserved service and providing a more liberal access regime for Australia Post's competitors seeking to use Australia Post's network. By seeking to implement its plan unchanged, the government was trying to ignore the election results.

The CEPU responded to this situation by instituting a major parliamentary lobbying campaign. This focused on ensuring that opposition to the government's Bill was maintained by the major opposition parties (principally Labor, the Australian Democrats and Greens). It also sought to undermine the confidence of the government by lobbying government backbenchers and preparing detail submissions arguing against the Bill.

A watershed in this process was a public hearing before a parliamentary committee of the Senate. This committee was charged with reporting to the Senate on the proposed Bill and as such would reflect the extent to which the various political parties in the Senate opposed or supported the Bill.

The CEPU made a major submission to this committee and took part in the public hearing. In the context of re-iterating our concerns with the government's postal deregulation plans, the CEPU pointed out that the Bill should be rejected by the Senate on the grounds that it would have overwhelmingly negative impacts on Australia's postal services, ignored the real nature of the industry to Australia Post's peril and ignored the fact that the existing regulatory regime is sufficient to provide appropriate levels of competition, secure existing services and provides a platform for the delivery of improved services in the future. We stressed that the "liberal" access regime proposed would effectively undermine the remaining reserved service. Finally, the CEPU emphasized our positive agenda of change for Australia's postal services, including the provision of a range of additional services and guarantees.

Various pro-and anti-deregulation organizations made submissions and presentations to this committee. While a number of potential competitors (such as Deutsche Post Global) made submissions, the overwhelming majority to presentations were from the community and expressed concerns with the government's Bill. The CEPU submission made a major impact, with the overall impression of the hearings being that the government's approach was ill-conceived and fraught with negative community impacts. Even the government members of this committee expressed concern at the potential negative effects of the Bill on community access to various postal services. The end result was a parliamentary report released in June 2000 in which the parties controlling a majority in the Senate (Labor and the Australian Democrats) declared their opposition to the Bill, with even government members recommending amendments to their own government's legislation!

This represented a major victory for the CEPU on its road to defeat postal deregulation. Armed with this report, the CEPU had a public demonstration that the government had failed to convince the Senate of the justification for its proposed changes to postal services. Not only that, but the government's inflexibility had ensured that the whole postal deregulation was headed for a parliamentary defeat. The government's stated target of a 1 July 2001 start date for postal deregulation was beginning to look pretty improbable.

The Last Ditch - The "Secret" Postal Deregulation Bill

After the release of Senate committee report rejecting the government's Bill, the government's proposed postal deregulation plans appeared to enter "parliamentary limbo". The Bill existed, it remained on the government's legislative agenda and had commenced its legislative progress through the Australian Parliament. However the government was reluctant to formalize the Bill's rejection by pushing it on to the Senate for a decision. Consequently, the government used its power to delay its progress through the Australian Parliament.

However supporters of postal deregulation had not given up. One of the most disappointed postal operators with the apparent impending failure of the government's push for postal deregulation was the locally-based Ausdoc Corporation. This organization operated a private business under a specific exemption from the reserved service, granted in 1994. This allowed membership-based private postal operators to distribute standard letter mail between its own "document exchange centres". It was also free - along with any other provider - to carry any mail items above 250 grams. However the current legislation did not allow them to offer an end-to-end deliver service for mail up to 250 grams, customer direct to customer. To do so, the existing postal regulatory regime required Ausdoc to charge four times the Australia Post rate of 45c. Ausdoc were desperate to change this situation and looked to postal deregulation to give their company a further exemption.

With the original government Bill in "limbo", Ausdoc commenced discussions with the government to develop a "compromise" postal deregulation Bill targeted to their own needs. After encouragement from the government, Ausdoc lobbied the key minor party controlling the Senate - the Australian Democrats. No discussion were held with the Labor opposition - or for that matter the CEPU! That's why we referred to these proposals as the "secret" Bill.

As a result of this lobbying effort, the government drafted a further Bill on the basis of Ausdoc's lobbying and with the aim of gaining Australian Democrat support. This new Bill - innocuously titled the Communications and Arts Legislation Amendment Bill 2000 - aimed to give Ausdoc all they needed. Principally, it provided Ausdoc with an exemption to the reserved service to enable Ausdoc-type providers (i.e. membership-based providers) for the first time to provide an end-to-end mail delivery service in direct competition to Australia Post. Combined with evidence that Ausdoc is in financial trouble and is seeking to expand and re-badge its operations in response to this situation, this Bill constitutes a major threat to Australia Post's business mail market. The threat that this Bill posed was all the more given the fact that Ausdoc are currently offering free membership for businesses who only want to receive Ausdoc delivered mail. This would have the effect of potentially massively expanding Ausdoc's client base. The major provisions of the Bill were to:

ú provide preferential legislative treatment for a single private sector operator at the cost of the national provider of universal postal services;

ú effectively deregulate the business to business mail market;

ú open up approximately $700 million (or 40%) of Australia Post's reserved service revenue to full competition; and,

ú potentially jeopardize the funding of Australia's reserved postal services, including the standard letter service and other vital postal services, especially those in un-profitable rural and regional Australia.

In respect of the initial government deregulation proposals, this new "secret" Bill represented a reversion by the government to the more radical proposals of the NCC. The NCC had originally recommended the deregulation of the business sector of the postal market. This new Bill went a long way to implementing just such a simplistic and dangerous proposal. All this behind an innocuously entitled smokescreen.

Unfortunately for the conservative government, the CEPU's effective parliamentary lobbying ensured that we received a copy of the "secret" Bill almost as soon as it was drafted. This enabled the CEPU to analyze the Bill and to lobby the Parliament against the "secret" Bill. As a result, the major opposition parties again publicly declared their opposition to the "secret" Bill as well as the government's original Bill.

Deregulation Defeated

The whole campaign came to a head in the Australian Parliament in late March and early April 2000. Armed with the CEPU's 70,000 signature community petition opposing postal deregulation, copies of the "secret" Bill obtained by the CEPU and with our detailed analysis demolishing the new Bill's provisions, the CEPU's parliamentary supporters went into action.

Labor and the Australian Democrats mounted a series of parliamentary debates focusing on exposing the failure of the government to put its original Bill to the senate (for fear if its final rejection!) and its development of another "secret" postal deregulation Bill.

As result of this demonstration of the governments political failure - after four years - to gain sufficient Senate support to have its postal deregulation plans adopted, the government formally withdrew its original postal deregulation Bill from the Parliament on 29th March 2001. To the howls of the opposition, the government was forced to concede its lack of support on the issue and resort to attacks on the CEPU, its members and Australia Post, blaming the union for its defeat.

In a final demonstration of their failure, the government resorted to denying the existence of its own "secret" Bill, to the extent of refusing the Labor opposition leave to formally table the actual Bill in the Parliament. In effect, the conservative government has abandoned its own Bill.

Where to Now - The Fight Continues!

The Australian conservative government's abandonment of its postal deregulation plans is a great victory for the CEPU, its members and our four year fight against these destructive plans. It represents a major setback for those supporting postal deregulation - both in terms of the governments failure but also in terms of the CEPU's effective mobilization of community and political opposition to such measures. The CEPU has created an impressive bulwark against future deregulation moves.

Yet we are under no illusions regarding the future. The conservative parties - despite their legislative defeat - remain publicly committed to postal deregulation. The Minister has pledged that the government has not given up and will continue to look for opportunities to advance postal deregulation, either before or after the next national elections.

Conversely, our support has taken a major effort to mobilize. The CEPU knows the amount of work and effort that was needed to convince the community and opposition political parties to ensure this mobilization. We will have to continue our work with these sections of the community to maintain their opposition to future postal deregulation moves and to gain their support for a more positive agenda of change.

Therefore the CEPU has resolved to continue our campaign in defence of Australia's postal services up to the forthcoming national elections and beyond. This campaign will be extensive, targeted and effective and will ensure that those supporting postal deregulation are rejected by the Australian electorate.

Nevertheless, this recent defeat of postal deregulation in Australia should give encouragement to all postal workers, their union and the UNI in our common fight against such measures. After the disastrous experience of postal deregulation, service closures and union-busting in New Zealand, this Australian union victory a shot in the arm for the postal union movement.

By mobilizing wide community and political support postal workers can defend our vital postal services and jobs. And we can defeat the self-interested, cream-skimming operations of private postal operators and the plans of their political supports to undermine the community interest.

For further information contact Jim Claven at the CEPU - JClaven@cepu.asn.au

Section 3

Section 3 defines a letter and a standard postal article. The latter is defined as not weighing more than 250 grams, not more than 5mm thick and are of specific dimensions (Section 3);

Section 27

This section requires: