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Proposed changes to Rural Post and the NZ Post Deed

29 January 2013

Proposed changes to Rural Post and the NZ Post Deed

Federated Farmers is to consult its membership on proposed changes that could radically reshape the delivery of physical mail to over half a million New Zealanders in rural areas.

“NZ Post deserves praise for the way it has worked with Federated Farmers, Rural Woman NZ and the other rural stakeholders,” says Bruce Wills, Federated Farmers President.

“This will largely not come as a shock because we are living through a fundamental shift in technology. The decline in physical mail is offset by the rise of electronic mail.

“Commercially, NZ Post’s business model must either evolve or face extinction but I doubt many people can seriously argue the status quo is tenable.

“The proposed changes will most be felt by communities who have already lost physical services and that have few technological options available.

“This is something NZ Post recognises in the discussion document noting rural, “are also areas where access to the internet at speeds sufficient for digital communication options to displace postal services is most likely to be limited”.

“Even if we take the most optimistic assumptions about rural broadband, it still leaves some 86,000 people off-line; more than the population of Palmerston North.

“Many farmers rely on Rural Post contractors for more than the mail including newspapers, courier items and even groceries. There is also an unquantifiable socialisation element too. Yet we also understand Rural Post contracts on their own are basically uneconomic; clearly any reduction in delivery days will affect this even more.

“In looking at this, one sector that could lose out heavily is the traditional daily newspaper; a sector already under siege.

“Farmers tend to be heavy subscribers and a key advertising demographic. NZ Post’s move may drive innovation in terms of delivery but we will have to wait and see how that industry responds through the consultation.

“What we do know is that change is coming and what service level will be acceptable will be member driven. That said, as long as a Universal Service Obligation exists, Federated Farmers will strongly resist any separate ‘rural delivery fee’.

“We have been there before and it simply did not work.

“Laying the status quo to one side, the choices are really between a stop-gap that will buy only a limited amount of time, right-sizing services in order to be economic or cutting NZ Post free and allowing market forces to work things out,” Mr Wills concluded.

ENDS

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