An Ombudsman’s call for Australia Post to update 22-year-old compensation levels for lost parcels has been rejected.
The Postal Industry Ombudsman, Professor John McMillan said he disagreed with Australia Post’s decision that the compensation levels were adequate and should not be reviewed after all this time.
Professor McMillan released his report, Determining levels of compensation for loss or damage of postal items, on the issue.
Calls for increased compensation
“Postal customers would expect that the level of compensation for service failure would be reconsidered in light of changes in the Consumer Price Index (CPI), or at least be reviewed whenever the cost of basic postage is reviewed,” he said.
“If present compensation levels are adequate, that should be explained following a proper review.”
Professor McMillan suggested compensation levels be looked at by the Australian Competition and Consumer Commission whenever it considered proposals to increase the basic postage rate.
He said the maximum compensation for items sent by ordinary post in 1987 was $50 but in 2010, with inflation, the real value had halved.
The Ombudsman said if the pricing had kept pace with the CPI, the figure would be over $100 today.
Professor McMillan said the maximum basic compensation for registered post and cash on delivery items was set in 1996 at $100 but that as CPI had increased by 39 per cent since then, $100 in 1996 was now worth only around $70.
He said customers could choose to buy ‘Extra Cover’ of up to $5,000 for an item.
“One result of the declining real value of compensation for ordinary items is that people must now buy more expensive products and services to secure the same level of cover,” Professor McMillan said.
“This can disadvantage residents of remote, regional and rural Australia, in particular, who may have only limited access to postal services run in competition with Australia Post.”
He rejected Australia Post’s suggestion that compensation provided for ordinary items should be set as a proportion (half) of that for registered items.
‘This forges an unwarranted link between compensation for Australia Post’s monopoly of the ordinary letter service and the registered service that is open to competition,’ he said.
The Ombudsman said 2,219 complaints about Australia Post were made to the his office in 2008-09, 21.2 per cent of which concerned loss of a postal item.
The report was available from www.ombudsman.gov.au
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