2 May 2013

Govt warned it may have to subsidise deliveries

5:44 pm on 2 May 2013

New Zealand Post has warned the Government letter deliveries might need to be subsidised if it has to continue its six-day-a-week delivery service.

But the state-owned company's chief executive, Brian Roche, says it wants to retain the service for as long as possible.

In a letter to shareholding ministers Bill English and Tony Ryall, New Zealand Post says if it can't reduce deliveries to three days a week, it would then need to talk to the Government about subsidising the service.

Mr Roche says it is not an ultimatum - but one of the policy options the company would consider.

He says the volume of mail is continuing to decline and the six-day-a-week service will inevitably become uneconomic.

At that point, New Zealand Post would want to reduce deliveries or seek a subsidy, he says.

"We've made pretty clear - and we don't believe in a provocative way - that if the Government decided it wanted six days a week and we were unable to make a profit out of that, that under the SOE Act we would be entitled to request.

"The open question is, having requested it, would we get a subsidy and we aren't actually asking for one - we're just signalling that that remains a policy option."