They're vital community hubs, but regional post offices face uncertain futures

Advocates say small-town post offices need to be kept alive as aging licensees and changing community needs threaten their future.

A Senate inquiry is underway into Australia Post's retail network that will look into, among other factors, the role licensed post offices (LPOs) play "in delivering community services".

But in Tarpeena, in South Australia's south-east, locals already know what losing the local post office can mean.

In 2022, the LPO running out of the local pub, the Pines Hotel, was closed, leaving the closest post office 20 kilometres away.

Long-time postie Shirley Little's mother owned and managed the LPO for more than four decades, back when it operated alongside the local general store.

"I think when the post office did eventually close down, the older people missed it because it was somewhere they could go every day and someone would say hello to them," she said.

An asset for communities

About two-thirds of the Australia Post network is made up of LPOs, with about 2,900 operating across the country.

Unlike general post offices, which are run by Australia Post, LPOs are run by licensees either as a standalone post office or alongside another business.

The peak body representing LPO licensees, LPO Group, said other post office services, such as banking, were being "run down" as focus shifted towards parcel services.

"When you're in the rural and regional parts of Australia, that's one of the most important businesses in your town," LPO Group CEO Scott Etherington said.

Pines Hotel licensee Lynton Cram said after the post office moved into the hotel, it failed to attract business.

"During the week I had very little business, apart from delivering the mail and sorting it," he said.

"As far as doing any other transactions like parcels or cash transactions, it was very minimal."

Changing nature of the post

In its submission to the inquiry, Australia Post said it faced growing challenges in the regions, including declining foot traffic, increasing costs and a lack of workers.

It said 38 per cent of LPO owners were aged 60 or older, and 39 per cent in non-major cities intended to exit the network within three years.

An Australia Post spokesperson said it had been engaging with the inquiry, and would review and consider the committee's report.

"We have expanded how and where customers can access our services.

"We've done this by adding self-service options like parcel lockers, which are in addition to our reported retail outlets. These services complement post offices, not replace them."

The spokesperson said Australia Post had paid $635 million in commissions to licensees in the previous financial year, and that those payments had increased each year for the past 15 years.

"For the past two years, we have been engaging with licensees and their representative associations to update the current LPO model, which is more than 30 years old," they said.

"This consultation is ongoing."

More than 140 submissions have been made to the inquiry, with the committee's report due on October 22.