Friday, 26 July 2013



Post-post-post-Office: Rethinking the Closures
By Malcolm Deans

The recent announcement that NZ Post will close its Dunedin Mail Centre, with the loss of 73 jobs, has come as a major blow to the Dunedin economy, already reeling from the closure of the Hillside Engineering railway workshops last year. NZ Post has decided it wants to close the Dunedin, Wellington and Hamilton mail processing centres, as well as all its small satellite centres, centralising all sorting at the remaining three: Auckland, Manawatu, and Christchurch. The restructuring process would result in 500 job losses, compensated by 380 additional jobs after centralisation, a net loss of 120 jobs. With the loss of 100 jobs from its corporate section earlier in the year and the threat of a reduction in service to three-day delivery with the resulting impact on postal workers, NZ Post management seem determined to add more workers to the ranks of the unemployed alongside other government owned or operated organisations.

At the same time that state-owned enterprises are throwing long-serving employees on the scrapheap the National government is dreaming up ways to force beneficiaries into competing harder for fewer and fewer available jobs while letting the private sector tap into government revenue streams in the process. Witness the recently revealed plans to pay private contractors up to $12,000 per person to get mentally ill beneficiaries into waged work.

The news of the impending closure of the Dunedin Mail Centre has drawn heavy criticism from the mayor, the editor of the ODT, and the Chamber of Commerce, for ignoring the economic needs of the region but predictably these criticisms have been couched in the language of regional competitiveness, setting workers in this region up against workers in Christchurch. The mayor of Hamilton is also on record saying that Hamilton should have been expanded at the expense of Auckland.

For the postal workers, however, this is just one more result of the corporatisation and deregulation of the postal service that has taken place since Labour first split up the old NZ Post Office into NZ Post, Postbank, and Telecom in 1987, corporatising them in preparation for privatisation. Initially to be privatised, NZ Post managed to escape the fate of the other two SOEs with the government steadily moving towards a fully deregulated postal market. Letter delivery was fully deregulated on 1st April 1998 which required NZ Post to open up its postal network to private companies to compete without any of the requirements placed on the NZ Post to deliver a universal service that reaches the whole community. Under the Univeral Service Obligation, NZ Post is required by law to deliver letters throughout the country, 6 days a week, at a standard rate of 70 cents. Private competitors enjoy full access to the NZ Post network with none of the obligations to the NZ public allowing them to ‘cherry pick’ the most profitable urban mail deliveries. NZ Post currently gives access to 6 private postal operators with one, DX Mail, running its own delivery and box services. NZ Post has lost almost 40% of market share to its competitors.

Although letter volumes have declined dramatically over the last few years due to the ubiquity of email and social media, the parcel business has increased substantially due to the rise of internet trading. Deregulated earlier than letter delivery, the parcel courier market is a duopoly in which NZ Post-owned Express Couriers Ltd (ECL) compete with Freightways. A 50 : 50 joint venture with DHL since 2005, NZ Post bought DHL’s share of ECL out last year for $108 million. ECL has 40% of the market share in courier services. Always a profitable business NZ Post could be even more profitable if it did not have to compete under unfair conditions with non-union private operators. Wages in NZ Post are below the NZ industrial wage average and are even lower again in the prive competition. Deregulation and partial privatisation have been a disaster for workers. NZ Post’s current round of restructuring will lead to a vicious cycle of inferior services and declining mail volumes. Postal workers, and the communities they serve, need to join together to fight against the further destruction of our public postal service. In next week’s POINT I will discuss how we can do this.

Join the Facebook Group, Save Dunedin Post, here

This article was originally published in POINT Issue#34 3-9 JULY 2013

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