Postman’s knock

I am not a rabid believer in privatisation. I believe that it probably did not make sense to sell the airports and that a long term lease or management contract over the terminals would have been better. I also have my doubts about capital intensive projects like highways. There is little entrepreneurial skill in managing a road . They are mostly an exercise in capital raising, which theoretically a government can do at lower cost. I realise there might be a flaw in this argument, though I can’t spot it.

But there is no doubt that with any activity that requires a few management skills, the government will be rubbish. I have written here about the Sydney Ferries, a great example of this principle. Since I wrote that, services have been reduced and fares increased, usually not a winning business strategy.

Another example is the post office.

We get our mail delivered to a post office box. I won’t bother you with the reasons – they have to do with a postman who did not always want to deliver the mail and who was known to smash the letter box of anyone who complained.

I have to go to the post office each day to collect the mail. We are charged to rent the box ($80 a year) and also pay a fee ($70) to instruct the post office not to give our mail to the postman but instead to put it in the box. Now, the box is pretty small so if anything arrives that won’t fit or which needs a signature, they put a card in the box asking me to go to the counter. There is usually a long line at the counter, sometimes out the door. The post office does all sorts of other things as well as handling letters and selling stamps. They process passport applications, which seem to take about ten minutes. They  sell inkjet printers, DVDs, toys and  telescopes. So the line moves very slowly. The new CEO of Australia Post. Ahmed Fahour, who used to be with NAB, understandably wants to  take them into the banking business. That is unlikely to shorten the lines.

I also use a service called Mail Boxes Etc. I get large parcels, cases of wine and anything  that needs a signature delivered there. They do photocopying, printing and other office services. The funny thing is that there is never a line. They know me and as I go through the door they are usually ready with my parcel. Once the manager stopped me in the street to remind me they had a parcel. MBE is not government owned.

I am surprised that there a still people about who believe in government ownership of business.

The Greens want the NBN to never ever be privatised. Bob Ellis says nothing should ever be privatised. Academics are arguing against sale of Queensland Rail. But none of these people live in what some of us call the real world – they have never, so far as I know, had to produce anything and then persuade customers to hand over money for it.

What I do wonder, though, is whether any of them has been to a post office?.

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27 Responses to Postman’s knock

  1. Judith Sloan says:

    Ken, the argument about the lower cost of capital in the case of public ownnership has to be treated with qualification; the reason for this ostensibly lower cost is the knowledge on the part of the lender that the government will meet any contingency in the event of things going badly. In turn, this leads to excessive risk taking – or conversely, the lack of discipline of private sector activities that need to be financed and the capital repaid’

    The evidence is very clear about the benefits of private ownnership in terms of costs and efficiencies of construction – public ownership often leads to rorting, cost blowouts and lengthy delays.

  2. Rafe says:

    Yes, check out the work practices at the Vic desalination plant.

    Key to privatisation is good contracting, see how not to do it with the new tollways in NSW.

  3. conrad says:

    Actually, the most annoying thing I find about Australia Post is that most branches are open Monday-Friday from 9-5. How do people that work strict hours ever pick their parcels up?

  4. C.L. says:

    Why would you quote Bob Ellis in this post?

    It’s like posting Humphrey B. Bear or Shane Warne.

  5. Ken Nielsen says:

    C.L. I quote Ellis at every opportunity. Sorry, can’t help it.

  6. FDB says:

    Quite a lot of post offices are privately run.

  7. . says:

    I think unless we get a lot of competition from MBE etc, Aus Post will never be privatised. A lot of branches are privatised but run off a model where the central bsuiness is State owned and runs a protected monopoly. The Feds would need to dole out just compensation if it were to fully privatise it and open it up to competition, as it ideally should.

  8. Tim Quilty says:

    The post office francisees in small country towns are pretty good. They recognise you in the street, will organise to send an urgently needed package from the shop across the road out with the delivery today, ahd there is rarely a queue.

    And they’ve even been known to open early, stay open late, and put in a few hours on the weekend during busy periods like Christmas (though this relates to them hoping to flog off some of their own merchandise they have for sale).

    I don’t see this as as an argument against privatising the postal service, however.

  9. THR says:

    Bob Ellis says nothing should ever be privatised. Academics are arguing against sale of Queensland Rail. But none of these people live in what some of us call the real world – they have never, so far as I know, had to produce anything and then persuade customers to hand over money for it.

    This is a somewhat snide remark, Ken. Both academics and Mr Ellis ‘persuade customers to hand over money’, and both do so in a competitive market context. Those out of touch from the so-called real world are the privatisation fetishists, who think that Australians either want or will benefit from privatising the postal service, a move that will almost certainly prove unprofitable in a great many instances.

  10. ken n says:

    The evidence is very clear about the benefits of private ownnership in terms of costs and efficiencies of construction

    I am sure that’s right Judith. But couldn’t the same be achieved by a contract that did not give ownership to the private owner?
    I guess my discomfort is how public policy issues can be distorted to get these deals off. The Sydney Cross City tunnel where the government undertook to close roads to push traffic toi the tunnel.
    The Sydney Airport agreement severely restricts the government on what it can do with a new airport.

    I suspect – tho have not seem figures to show it – that these PPP deals include a factor to cover the risk of the investors subsequently being screwed by the government.

  11. ken n says:

    Sorry, buggered up the blockquote – you can probably work out what i was trying to do.

  12. ken n says:

    Both academics and Mr Ellis ‘persuade customers to hand over money’,

    How THR? Who are their customers?

  13. THR says:

    Academia has been heavily corporatised over the past couple of decades, and scholars compete for ‘customers’ (i.e. students) across disciplines and institutions. Bob Ellis is a freelance writer for a number of journals beyond the Drum, and also sells his services as am author of books, and as a speechwriter for pollies. To say it again, these guys, as a group, are probably far more ‘real world’ than the 0.001% of fanatics who want to privatise everything imaginable.

  14. . says:

    “Those out of touch from the so-called real world are the privatisation fetishists, who think that Australians either want or will benefit from privatising the postal service, a move that will almost certainly prove unprofitable in a great many instances.”

    Protip: Australia Post is already unprofitable. It needs to be privatised for the standard incentive based reasons.

    “To say it again, these guys, as a group, are probably far more ‘real world’ than the 0.001% of fanatics who want to privatise everything imaginable.”

    You’re confused THR. Most of them are a subset of the group Ellis belongs to. None of them have a lot of “real life” experience. Ditto for Government employees.

  15. ken n says:

    A different real world then THR. Different customers, different market. Not activities that need anything resembling business skills.
    I don’t know anyone who wants to privatise everything imaginable.
    Only activities that require management and business skills.
    Can you give me an example of a well run government owned enterprise?
    Do you remember Telstra/Telecom under government ownership? The weeks wait for a connection?
    Do you remember when most airlines were government owned and there was no price competition? Discounting was illegal.

  16. THR says:

    Protip: Australia Post is already unprofitable. It needs to be privatised for the standard incentive based reasons

    If it’s unprofitable, then there’s no reason to privatise it. Rural/outback mail isn’t likely to be profitable any time soon. If it is profitable, it still shouldn’t be privatised, as the profits can be used to cross-subsidise other programs and ventures.

    Most of them are a subset of the group Ellis belongs to. None of them have a lot of “real life” experience. Ditto for Government employees.

    It’s difficult to respond politely to this sort of nonsense. Aren’t you yourself doing a PhD in the cloistered world of free marketism? And you deign to accuse others of being out of touch?
    Academics are forced to compete for students on a competitive market. It may not be as competitive as the fantasies you read in the novels of humourist, Rand, but it’s competitive all the same. As for ‘Government employees’ – you don’t seem to know your arse from a hole in the ground when it comes to the public service. Are you suggesting that somebody with your free market fetish (like I said, about 0.0001% of the populace) is more down with the ‘real world’ than nurses, disability workers, police, military, teachers, etc? Quit the magic mushrooms, comrade.

  17. THR says:

    Can you give me an example of a well run government owned enterprise?

    The PBS is one. Many hospitals are well-run, all things considered. Where government enterprises are not well-run, there’s usually a combination of factors at play that have little directly to do with privatisation.

    I don’t know anyone who wants to privatise everything imaginable.

    I’d imagine most of the self-described libertarians at this site would privatise everything. I’m happy to stand corrected if wrong.

    Do you remember Telstra/Telecom under government ownership? The weeks wait for a connection?

    The telecos are still largely hopeless, except now, your complaints are outsourced to somebody in Mumbai for 20 cents an hour.

  18. . says:

    “If it’s unprofitable, then there’s no reason to privatise it.”

    ???

    Private firms competing with it are profitable, even though they are playing the Post Offices’ rigged game.

    It is wasting money or overcharging consumers.

    “If it is profitable, it still shouldn’t be privatised, as the profits can be used to cross-subsidise other programs and ventures.”

    So instead of taxing people, you’d nationalise their output? Of course you would comrade.

    “Aren’t you yourself doing a PhD in the cloistered world of free marketism? And you deign to accuse others of being out of touch?”

    You just proved my point about Ellis. I’m not out of touch. I’m at the coalface. Oh yes working in a university as a postgrad was so lovely and really supportive. Good luck in jamming the photocopier again. How many times before you get the PSM? Maybe you should try your hand at creative writing, since you just make facts up anyway.

  19. . says:

    “As for ‘Government employees’ – you don’t seem to know your arse from a hole in the ground when it comes to the public service.”

    I bet you’ve never worked a day in your life unlike the redoubtable PS’s I know.

  20. . says:

    “The PBS is one.”

    Bullshit. The PBS relies on massive subsidies to pharmaceuticals, making up for “discounted prices”. It’s a stupid idea. Just subsidise the cost if you are going to do this. We’re just duplicating administration for the appearance of getting something out of nothing.

    “Many hospitals are well-run, all things considered.”

    Like what, having persistent golden staph or piss poor contingency?

    “Where government enterprises are not well-run, there’s usually a combination of factors at play that have little directly to do with privatisation.”

    THR sez: It’s not our fault.

    I felt bad for making a snide remark against your work ethic, now you’re defending shitty hospitals 90% of the population (besides the loony cadre of the ALP) would say are atrocious, I don’t feel so bad.

    “The telecos are still largely hopeless, except now, your complaints are outsourced to somebody in Mumbai for 20 cents an hour.”

    Bullshit, I’ve never had a problem with my ISP/Telco. Nor did my family when I was a lad. Neither were Telstra. Telstra on the other hand played silly buggers and made me wait a week to unlock my phone.

    Never again.

  21. Peter Patton says:

    Actually, the most annoying thing I find about Australia Post is that most branches are open Monday-Friday from 9-5. How do people that work strict hours ever pick their parcels up?

    I have to say, I groan whenever one of those white slips appears in the letter box demanding an appearance before the local post office, with appropriate identification papers. But apart from inner city or regional hub branches, I don’t imagine it would be very economical to keep the local, suburban branches open late. Though maybe one or two nights a week to 7 or 9 would make sense.

  22. ken n says:

    Now you are talking nonsense THR. Scratching for answers, it seems to me.
    You stay in your world and I’ll try to build one for me, my family and my friends.

  23. Bruce P says:

    I own the MBE that Ken refers to and I can tell you that the number one reason people subscribe to our service is the lack of queues. Yes, you get a real street address with our service and we accept couriers and you get a fax number..these all attract customers. But the lack of queues remains the number one motivator. As 70%+ of Post Office transctions do not actually involve post at all, it would be hard to see how they could reduce the length of their queues. I cannot think of an example of where a government agency provides an equal level of service to a privately held alternative.

  24. Fleeced says:

    I detest Australia Post – their delivery service is terrible for packages. Quite often, they will just leave a note in your letterbox that you have to pick it up because nobody was home – even when their was somebody there all day. Sometimes, presumably when the delivery guy wants an early lunch, they don’t even bother with the note – you just get the final warning a week later.

    If I order online, and they have a courier option, I always choose this over Australia Post – even if it’s an extra few dollars.

    Normal mail delivery seems fine – though I suspect it’s likely inefficient.

  25. dover_beach says:

    Fleeced, I’ve experienced the same. Home all day, check the letter box mid-afternoon to find one of those notes with my mail. Just appalling. I got my own back one afternoon though; I accidentally knocked him off his m/bike while reversing out of my driveway. He and the bike were fine, if a little shaken and scratched.

  26. Rafe says:

    Conrad, the PO in Neutral Bay (Sydney) is open from 9 to 1pm on Saturday.

    I am a fan of Express Post, stuff that I left in Canberra yesterday morning arrived in my letter box today. It was posted after midday as well.

    Passport applications can stall a line for about half an hour on a bad day.

  27. Bruce P says:

    Rafe…you wouldn’t want to even attempt to go to the Neutral Bay post office on a Saturday. Queues are frequently out the door and wrap around the side of the building. Much better things to do with one’s weekend! 🙂

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