New Zealand Post wants to cut the number of days it is required to deliver mail to most addresses from six to three days a week.
Communications and Information Technology Minister Amy Adams said on Tuesday the company wants greater flexibility in its postal services as mail volumes are forecast to fall further.
The number of items mailed last year was down 24% compared with 2002, due to the increasing use of email and other digital technologies.
Under its current Deed of Understanding, New Zealand Post, a State-owned enterprise, must provide delivery on six days a week to 95% of addresses. It wants to change that to not less than three days a week delivery to 99.88% of addresses.
Ms Adams said any changes would need to balance the interests of postal users with a financially-viable postal service. "We'll want to talk particularly to rural communities, particularly to the elderly, people who do find it harder to communicate in other ways."
However, she said the way people communicate has changed significantly and New Zealand Post will not continue to be viable if it maintains the same service.
Labour Party state-owned enterprises spokesperson Clayton Cosgrove said a number of people still rely on postal services, so there must be wide consultation on the plan.
"It could have a negative effect on business and it certainly could have a negative effect on sectors of our communities where they don't have access to other technology."
Mr Cosgrove said New Zealand Post is there to provide a service - not a dividend for the Government.
However, the Green Party said it isn't surprising New Zealand Post is considering axing some delivery services, given the significant drop in the volume of mail.
Co-leader Russel Norman said like most other people, he tended to post letters only very occasionally and the Government and public need to weigh up whether it is worth subsidising a service in decline.
Under its preferred option, New Zealand Post said it could maintain most of its network and guarantee at least 880 stores, though it wants to install more electronic self-service kiosks to deliver its services. It acknowledges that some letters would take longer to arrive - particularly for rural users.
Federated Farmers and advocacy group Grey Power say the proposed changes could make many New Zealanders feel more isolated.
Federated Farmers national president Bruce Wills said mail is the only form of reliable communication for many rural people.
Grey Power president Roy Reid said many of the older generation still write letters because they do not use the internet and though the group understands mail volumes are dropping, halving the days of delivery is too much.
The Government must agree to change New Zealand Post's service obligations for the plan to proceed. Submissions on the proposals close on 12 March.
Big job cuts not ruled out
New Zealand Post is not ruling out that a third of its up to 8000 workers will lose their jobs under proposed changes to mail deliveries.
Chris Lake, an employee at the company and a delegate for the Engineering, Printing and Manufacturing Union, estimates that about a third of the workforce will have to go.
Chief executive Brian Roche has said that several hundred people will lose their jobs across its services, but told Radio New Zealand's Checkpoint programme on Tuesday that nothing is set in stone.
"I'm neither confirming nor denying. All options are open - it depends on what level of attrition we have, how we deal with it. I think the key point here is, let's do it once and let's do it properly."
Mr Roche said New Zealand Post wants to keep as many fulltime jobs as possible.
The EPMU says employees won't have enough to live on if their working week is cut to three days.
Postal and logistics organiser George Collins said it is a long-term issue that needs a long-term solution and New Zealand Post must provide jobs people can live off and a decent service for New Zealanders.
"Three days isn't enough to live on. The next thing of concern we have (is) I don't think New Zealanders are going to be too happy about having to wait several days for mail."
EPMU delegates throughout the country are discussing the proposal before a submission is sent to the Government.