The Updated Deed of Understanding between the government and New Zealand Post has agreed to retain rural mail deliveries at five a week but urban deliveries could go down to three a week.
Communications and Information Technology Minister Amy Adams says changes were required to ensure the postal service remains viable.
Under the agreement reached between the Government and New Zealand Post, changes to the Deed will not apply until 30 June, 2015.
“Around the world postal volumes are declining. In New Zealand this is at a rate of about 8 per cent per annum,” Ms Adams says.
“It is clear that if changes are not made to the Deed, then significant and on-going government subsidisation in excess of $30 million per year may be required.
“The decision to update the Deed reflects the need to balance the immediate interests of postal users with the longer term need for greater flexibility for New Zealand Post, given the dramatic reduction in the volume of postal items over the past 11 years.
“From their peak in 2002 mail volumes have dropped considerably, with about 328 million fewer items being posted in 2013 compared to 2002.”
New Zealand Post had sought the flexibility to reduce the frequency of mail delivery for standard delivery letters to a minimum of three days per week nationwide.
However, the Government was concerned about the sustainability of rural delivery services and rural contractors in general through fewer deliver days.
“Through negotiations, I have secured agreement from New Zealand Post that it will limit any introduction of a minimum three-day delivery to only urban areas, maintaining five-day delivery in rural delivery areas.
We currently get mail six days a week unless it’s a long weekend when there’s no delivery on Saturdays and Mondays.
Newspapers will be grateful that five-day deliveries are to be maintained because in most rural areas papers are delivered with the mail. If deliveries reduced to three a week most people wouldn’t bother subscribing.
“It is important to note that three-day delivery is the minimum standard New Zealand Post must meet. This means that New Zealand Post may continue to provide a higher frequency of delivery in some non-rural areas.
“The minimum standards in the Deed only apply to basic or standard postal services. The Deed does not apply to other types of postal products or services such as express mail, courier post, parcel post or premium services such as Fast Post.”
Changes to the Deed will also require New Zealand Post to continue to maintain a retail network of at least 880 points of presence, but permit this to be comprised of self-service kiosks, well as physical postal outlets.
Of the 880 points of presence, New Zealand Post has agreed to maintain at least 240 outlets where customers can receive personal assistance from an employee or agent of New Zealand Post.
“This will give comfort to members of the public who may feel anxious at the prospect of the introduction of self-service kiosks.”
The 880 and 240 figures are unchanged from the current Deed, but the specifics in each case have been modified to meet current requirements.
The timeframe for implementing any changes will be a commercial decision for New Zealand Post, after 30 June, 2015.
Minimum service requirements for New Zealand Post are set out in the Deed of Understanding it signed with the Crown in 1998. The Deed has not been significantly reviewed since it was signed.
Federated Farmers welcomes the announcement.
“This is great news for rural people, as many businesses are still heavily reliant on a five day service,” says Bruce Wills, Federated Farmers National President.
“New Zealand Post and the Government have clearly listened to our members concerns and we are pleased that they have recognised the uniqueness of the rural business model in their Deed of Understanding.
“Whilst technology is changing the way we communicate and eventually we will see a decline in postal deliveries, we are not there yet. There are still some 86,000 rural people off-line, where rural post is a daily fixture in the running of their business and household.
“We would like to thank all parties involved for highlighting the unique situation that rural New Zealand is in when it comes to postal delivery,” concluded Mr Wills.
“In our submission, which Minister Amy Adams has acknowledged, we highlighted that the rural delivery is so much more than just a mail service and anything that threatened its sustainability would have widespread unintended consequences,” says Rural Women national president, Liz Evans.
“It is a wraparound distribution service that is part of the fabric that holds rural communities together.
“Our rural delivery contractors provide a lifeline, delivering supplies, repairs and spare parts, animal health remedies, medicines, and courier parcels.
People pay for these services but it would be more expensive and less regular if the rural delivery contractors weren’t able to provide them five days a week.
“The five day service ensures people are able to run their farming enterprises and other rural businesses effectively, even from remote locations.”
Rural delivery contractors also pick up mail and parcels, meaning that it’s feasible to run a production-based business from a rural location. These businesses breathe life into rural communities, as we have seen through our Enterprising Rural Women Awards. Rural Women NZ’s plea to preserve the existing rural delivery service was also based on the limitations of other communications facilities, that urban people take for granted.
“In many rural areas there is limited or no cellphone coverage and we are still dealing with dial-up broadband connections in many cases.”
The mail service is used a lot less than it used to be and the decline is likely to continue.