It seeks urgent funding to meet increased demand
Australia Post has admitted that it is under pressure from customers as it steps in to fill the gap left by numerous major bank branch closures.
Paul Graham (pictured above), chief executive of Australia Post, stated at a senate inquiry on Tuesday that the Bank@Post service, handling nearly $10 billion in cash annually, requires urgent funding from major banks for long-term sustainability.
According to a recent Senate report, over 2,100 bank branches have shut down between 2017 and 2023, a 39% reduction in active branches.
“As banks accelerate closures, they are saving billions of dollars, and as this inquiry pointed out, they have shifted costs onto Australia Post, which is effectively subsidising bank profits,” Graham was quoted as saying in a report by The Australian.
Australia Post has also faced rising compliance costs and increased demand for banking services due to these closures, handling over a million business transactions annually, according to Graham. He pointed out that Bank@Post was never intended to handle such volumes, leading to inability to meet customer demands.
“Currently, Bank@Post is heading for significant losses in the midterm, unless our bank partners provide additional funding,” he said.
The government-owned postal service corporation seeks enhanced funding to reconfigure many outlets to accommodate extra customers and implement increased safety measures for customers and staff. It also plans to close underperforming outlets, reducing its network from over 4,200 outlets to 4,000 in the coming years.
The Australian report indicated that Australia Post is in discussions with Commonwealth Bank, National Australia Bank, and Westpac to secure its future and is negotiating with ANZ to join Bank@Post.
“We are committed to continue to provide these services, provided the banks step up as they’ve closed many branches over the years and transferred the cost of that to Australia Post its licensees,” Graham said. “We want to ensure we have got a framework that is sustainable for the long term.”
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