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01/18/2017 12:00:00 AM


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Stanley, Brian

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Bills

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Communications Regulation (Postal Services) (Amendment) Bill 2016

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Second Stage

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Communications Regulation (Postal Services) (Amendment) Bill 2016\Second Stage
Bills\Communications Regulation (Postal Services) (Amendment) Bill 2016\Second Stage

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Communications Regulation (Postal Services) (Amendment) Bill 2016

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Second Stage

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Senator


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Deputy Brian Stanley

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Deputy Brian Stanley

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Brian Stanley

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Snippet Contents:

The post office and postal services are highly valued by the public and people trust the service. The universal service obligation, which delivers 94% of all domestic mail the next day, is unrivalled in Europe. It is a fantastic service. However, the fall in business in the postal services and in post offices generally has put the future of this service at great risk. To maintain the service, we must work to ensure that people have good reason to use the postal services, visit post offices and do business there. The problem with the Bill is not just the price increase. Sinn Féin sees that action has to be taken, but the defects in An Post were highlighted as far back as 2002 and 2003. That point was reinforced in our discussions at the committee yesterday. However, there is no point in going backwards. We know that action should have been taken through the noughties, but it was not, so we must take it now.
There is a problem with just repealing section 30 of the 2011 Act and removing the cap ComReg can currently impose. ComReg can set a range and I understand the current range is 60 cent to 75 cent. Removing this power is a negative move. We believe that there should be freedom to increase charges but ComReg needs to play a role. The Bill removes ComReg's role, which is counterproductive and will push more customers away. This is particularly the case given the price increase that has been mentioned. The Bill does not simply raise the price cap but gets rid of it completely. We need to be careful because it removes the checks and balances currently in place in this important public service.
Significantly increasing the price of postage before the development of an enhanced An Post service will jeopardise the viability of the company further. By lifting the cap on postal pricing, we are told that it is expected that the increase in the cost will be in the range of 12% to 38%. It is a certainty that an increase at the higher end of the scale will dissuade people from using the postal service. The Bill may temporarily help to tackle the financial challenges faced by An Post but people will vote with their feet in the medium to longer term. The General Secretary of the Irish Postmasters' Union has expressed concerns that the price increase will reduce the volume of business and threaten the postal service. Age Action, whose representatives also attended yesterday's committee meeting, also raised serious concerns about the intention to repeal the price cap and remove the ability of the Commission for Communications Regulation, ComReg, to impose a price cap, citing the effects of previous price increases. The organisation argues that the increase will affect older people disproportionately as they are more likely to use postal services. It noted that only 3% of those aged over 75 years used electronic mail. The repeal of the pricing cap also represents a weakening of the power of the regulator. ComReg's role will become one of a spectator or commentator at best.
The postal service industry in Ireland had a turnover in 2015 of approximately €540 million. An Post's losses in the same year amounted to €25 million, the bulk of which, as we learned yesterday, can be attributed to international mail delivery and the registered mail service. An Post receives only 44 cents per standard letter item for international mail. Domestically, however, postal services are almost breaking even.
The consulting group, McKinsey, has been hired to conduct a strategic review and advise An Post on the future of the business. It is surely premature, therefore, to implement price hikes. While Sinn Féin accepts it is necessary to take action, it is wrong to remove the role of the regulator and its ability to impose a cap on prices before the McKinsey report has been published. I understand the report is due in April or early May.
Although An Post and the broader postal service network in Ireland are separate entities, they cannot be viewed in isolation from one another. The post office network must be considered in any examination of postal services. The financial health of the postal network and the well-being of the corporate structure of An Post are related. Sinn Féin supports the expansion of the services provided by the post office network. Giving post offices the ability to sell insurance, process motor tax, offer single payment accounts, provide banking services and process the payment of bills to local authorities are positive moves which Sinn Féin supports. We support most of the recommendations of the Kerr report and want them to be implemented speedily. As I stated, these issues have been discussed for years. The initial Kerr report was produced 12 months ago and a supplementary report has been produced in the meantime. It is time to act on them.
It is crucial that the Government does not encourage business away from post offices by directing people to have welfare payments paid directly into bank accounts. There is broad agreement among An Post and other stakeholders on the key recommendations of the Kerr report. The success of the recent pilot scheme between post offices and credit unions demonstrates the scope for bringing additional financial services to the post office network. There is no reason for not rolling out this scheme across the entire network of 1,130 post offices.
The local post office is an essential component of the cluster of businesses needed in any small town or village. The post office network must be protected and the services provided must be enhanced. The removal of the local post office has detrimental knock-on effects on other small business in a small town or village. The Government must take action in this regard and ensure the position of the local post office is cemented before resorting to permitting price hikes.
Sinn Féin is committed to creating a vibrant post office network across the country. We want to protect the universal service obligation, ensure adequate funding for it and avoid potential threats to pay and conditions of staff who recently received a 2% increase. We want to ensure competition in the postal sector does not reduce quality of or access to service, retain An Post in public ownership and protect rural communities from further decline. While a price increase may be necessary, pushing through this Bill prior to the McKinsey report being completed and the Kerr report recommendations implemented is ill-considered and puts the cart before the horse.
The purpose of the Bill is not to permit price increases but to sideline the Commission for Communications Regulation. We complain a great deal about the inactivity of regulators. This legislation sidelines and removes a regulator from the pitch, which will result in ComReg becoming a spectator or, at best, a commentator. This is the wrong approach and Sinn Féin will seek to amend the Bill.