Thank you Chair and Senators. My name is Paul Graham, I am the Group Chief Executive Officer and Managing Director of Australia Post, and I am joined by Jane Anderson Executive General Manager, Community, Sustainability and Stakeholder Engagement and Nick Macdonald our Group Corporate Secretary.
I would like to start by acknowledging the traditional custodians of the Canberra region, the Ngunawal and Ngamberi peoples and pay my respects to their elders past and present. I would like to thank the Committee for the opportunity to provide this opening statement.
As I appear before you today, Australia Post team members across the country are working day and night to collect, process and deliver a record number of parcels following the recent Black Friday and cyber weekend sales.
Australians have embraced eCommerce, with Black Friday now our single biggest retail event nationally. Last year during peak, we delivered nearly 103 million parcels, and we are on track to surpass that in 2025.
We've been planning for Peak all year, focusing on increasing our capacity and improving our services. I am immensely proud of how Australia Post comes together to support customers and each other every peak, be it in our delivery network or our community post offices. This is especially true for the hundreds of thousands of Australian small and medium online e-commerce retailers.
This year have recruited over 3,700 seasonal team members to help in key roles across our facilities, retail network and customer contact centre. Additionally, as part of our One Team program, our support team members have signed up to over 2,500 shifts in the frontline.
We are nearing the end of our Post26 Strategy, and we have made significant progress during this time. We have achieved key modernisation reforms and rolled out a New Delivery Model. We have negotiated new Bank@Post deals with all major Australian banks and implemented a new state-of-the-art point of sale system across our retail network. We have simplified our business and rolled out Our AP Way culture program across our workforce. Put simply, we are focused on delighting our customers and community, while building a more financially sustainable business.
In FY25, Australia Post made a pre-tax profit of $18.8 million dollars. This comes off the back almost $290 million dollars in losses over the past two years.
While the key driver of our improved outcome has been the continued growth of our Parcels business, this has been offset by the underperformance of our Letters service, which saw volumes decline almost 12% comparatively year-on-year. Letter volumes have fallen to levels last seen in the 1930's.
In FY25, we valued our Community Service Obligation at $391 million dollars and despite these financial challenges, we met or exceeded all of our CSO obligations.
Our return to a modest profit is also the result of focused efficiency measures. Last financial year we achieved $159 million in business efficiencies through simplification of processes, prudent cost management and the closure or sale of non-core businesses. But it is not one-way traffic. We also invested $372 million in new facilities, fleet, and technology, bringing our total investment over the past four years to almost $1.5 billion of capital.
We have made significant progress in building a more sustainable business and achieved our target of sourcing 100% renewable electricity across all operational sites, this a major milestone in our decarbonisation strategy.
We continue to support regional and remote Australia, with seven new parcel facilities in regional areas as well as our Community Grants program, which supports mental health initiatives nationally.
These investments all reflect our clear direction - to build a modern, sustainable, and efficient parcels-led business that can meet Australia's growing eCommerce demands while continuing to serve the Australian community with essential services they require.
This is a delicate balance, and I would caution that despite the positive headline of a return to profit, our underlying financial position remains very fragile. The Australian parcels market is fiercely competitive, with global eCommerce giants investing billions to build their own logistics networks, as well as a growing number of new start-up providers with limited infrastructure, targeting metro customers as well as small to medium businesses.
In this context, future profitability is likely to be temporary, unless we secure further reforms, and broader structural issues are addressed. Internationally, postal operators in the US, UK, Canada, France and elsewhere have required billion-dollar government bailouts to remain viable. We do not want to be in a position where we need to ask for similar help.
Australia Post remains at a crossroads. We have returned to profit, but only modestly, and only after significant reform and investment. The Letters service remains structurally unviable, and at the same time, the Parcels business is growing, but under intense competitive pressure.
Our goal is clear - to remain self-funded, financially sustainable, and nationally relevant. But that will require continued support and partnership with government, unions and communities and a recognition that the challenges we face are not unique to Australia - but our solutions can be.
Finally, I thank our extended workforce of 64,000 team members for their dedication and I look forward to working with this Committee, the Government, and all stakeholders to ensure that Australia Post remains a trusted and viable service for all Australians.
