Update to New Zealand Post’s Deed of Understanding

Communications and Information Technology Minister Amy Adams has today announced that the Government has reached agreement with New Zealand Post on changes to the Deed of Understanding, 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.

“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.