Kiwis to get say in NZ Post changes

Communications Minister Steven Joyce. Photo / Sarah Ivey

The public will get a say in whether NZ Post is allowed to end Saturday deliveries or implement other cost-saving measures in its struggling mail business, says Communications Minister Steven Joyce.

NZ Post chairman Jim Bolger has suggested several options to address rapidly declining letter volumes as use of electronic communications including email continues to rise.

The options include cancelling Saturday delivery, delivering mail only every second day, increasing prices and further developing the two-tier mail system where premium letters cost more but are delivered faster.

Yesterday Mr Joyce, who has the final word on big changes to the postal system, said NZ Post had a "universal service obligation" dating back to when it was set up as a state-owned enterprise. That held it to "certain levels of service" including deliveries to everybody six days a week.

"Ultimately the universal service obligation belongs to Kiwis so we'd be driven a fair bit by their views.

"There's no requirement, but we'd seek to consult if NZ Post put forward a proposal."

Grey Power, Trade Me and Prime Minister John Key all panned the proposal to end Saturday deliveries.

Grey Power's Northland director, Jack Kerr, said mail was the one form of communication still available for all elderly people. "We still rely on good old-fashioned letters." Although Mr Bolger said it was wrong to presume older generations were not computer-literate, Grey Power estimates fewer than 50 per cent of beneficiaries own a computer.

Mr Key said electronic mail was now used "an awful lot, but a lot of New Zealanders still rely on the postal service ... Personally I would take a lot of convincing".

Trade Me spokesman Paul Ford said about 25 per cent of sellers on the auction website sent goods by post and cutbacks to postal services might make buyers wait longer for delivery.

"Anything that makes it harder for our buyers and sellers is bad from our perspective."

NZ Post's letter volumes have been in decline for years but lurched lower recently. In the 12 months to June last year letter volumes fell 6.7 per cent against the 1 per cent or so seen in previous years.

That was a factor in the profit from NZ Post's mail business falling from just under $50 million to little more than $20 million over that period.

Yesterday, Mr Bolger told Radio New Zealand NZ Post's mail delivery business was not yet running at a loss but that point was "not far away".

His letter to SOE Minister Simon Power this year contained a "menu of options" about how NZ Post could meet community expectations and run a sensible business in the face of these changes, he said. "If we don't have mail we can't deliver it.

"We can't continue to have vehicles and people going up and down every street every day with nothing to deliver, doesn't make any sense at all."

He said NZ Post's board had yet to make any specific recommendations as it was working through the options.