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AusPost made letters business ‘look worse’: report

Wednesday, 12 July 2017
By Print21

There’s been a call for an independent inquiry into reports that accounting practices at Australia Post over the past six years made the performance of its letters business appear worse than it actually was.

The Australian Financial Review says its exclusive analysis of AusPost’s accounts reveal that the national carrier ‘restated’ its segment revenues and expenses a total of 49 times since Ahmed Fahour took over as CEO in 2011.

In the five years before 2011, the accounts were restated just once.

The constant restatements made the performance of letters look worse and the performance on parcels look better, UTS accounting professor Peter Wells told AFR.

This occurred at the same time that Australia Post was campaigning for higher letter prices and the introduction of a two-speed letter service.

 “This raises legitimate questions about whether the restatements were done to make the performance of letters look worse,” Wells says.

The mailing industry reacted with a mixture of dismay and outrage to the report.

“I smell a rat like you would not believe,” says one mailing industry veteran. “It certainly looks a little dodgy.”

‘They’ve been trying to push people out of letters’: Rod Peirce, Smartcomm

Rod Peirce, owner of leading Brisbane mailing house and digital printer Smartcomm, says corporate regulator the ACCC should investigate Australia Post’s accounting practices.

“There should be a formal independent inquiry and I’m surprised that the ACCC or the federal minister hasn’t already picked up on it,” says Peirce.  “They’ve been trying to push people out of letters. The impact that policy has had on mailing businesses alone should justify looking deeper into these accounting practices.”  

The constant restatements made it difficult for outsiders to determine the true performance of three key AustPost businesses – letters, parcels and retail.

William Ammentorp, a former banking analyst, told AFR the restatements resulted in “generally adverse” outcomes for letters and positive outcomes for parcels and retail.

Ammentorp concluded that Australia Post’s 85 per cent restatement rate between 2011 and 2016 “raises questions around their frequency, direction and strategic purpose.”

A spokesperson for Australia Post says: “Australia Post has undergone a significant transformation since 2010 as a direct result of digital disruption. As the business has evolved we have made a series of incremental changes to our business structures.”

Australia Post again increased its business mail prices from 1 July.

 

 

 

 

 

 

 

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