Mr. Ned O'Hara:

On behalf of the Irish Postmasters' Union, we thank the committee for inviting us to address it today. I hope that after our presentation, the committee will recognise the urgency of the situation facing the post office network. The Irish Postmasters' Union has been in existence since the foundation of the State and has continued to represent the vast majority of postmasters since then. We will hopefully be celebrating our centenary conference next year. Notwithstanding the difficulties we face, we appreciate the opportunity to present our case.

We ask the committee to express to the Taoiseach and members of the Cabinet the urgency and benefit of supporting the network with the financial support recommended by the business advisers Grant Thornton in its review of the economic contribution and financial sustainability of the Irish post office network published last September. The investment recommended by Grant Thornton would bring numerous benefits which I want to rehearse lest we forget them.

We are all in favour of communities and this would give medium-term certainty to communities that their local post office, designated an essential service during the Covid-19 pandemic, will remain at the heart of the community. It will provide access for consumers to local services for all members in society, particularly the marginalised, financially excluded and most vulnerable who depend on the network for their services. We provide a high level of customer service for all post office services, banking and cash transactions. We deliver more than €4.6 billion in cash transactions to social welfare customers without any transaction charges such as bank charges.

Research by citizens' advice in the UK found that the post office was one of the most important services in local communities ahead of the bank, library and pub. The money the post offices hand out locally is spent locally thus sustaining and creating local jobs. Grant Thornton reported the multiplier effect of this on the local economy was phase two of two, so the €4.6 billion has a multiplier effect of two for local businesses.

As bank branches continue to close, the post office network is becoming more critical to small businesses to meet their daily cash and banking needs. We facilitate social welfare and National Treasury Management Agency, NTMA, services for Government but we can do much more. We are a physical deterrent to social welfare fraud and provide greater security for businesses and the Government. We can be the State on people's doorstep.

The post offices provide a reassuring sign of the presence of Government in communities. From an environmental point of view, we can be a one-stop shop for services. There is no need for multiple trips. We can reduce the carbon footprint by keeping services local and provide a trusted avenue for the green agenda.

We provide social cohesion and connection and community identity. We help sustain communities and help people with low literacy, the financially excluded and the most vulnerable. We provide Government, tourist and community information and help with social isolation. We are safe, secure and trusted and one of the last face to face institutions left.

I will address some of the issues around community banking and the post office network and the concept of community banking as a panacea for the post office network. Conceptually, we are in favour of community banking. Given our country's history in relation to banking, who would not be in favour? Notwithstanding macro-level banking issues for the banking industry in Ireland, we have to bear the following in mind when assessing the likely benefit for the post office network.

The opportunities for banking in the post office are in direct competition with the increasing trend towards online services. The components of banking are deposits, current accounts, loans, mortgages and across the counter transactions servicing these components. An Post accepts deposits on behalf the NTMA for post office savings bank, Government investment product and prize bonds. If a community bank were to replicate this activity, we do not see the benefit to the network in relation to transactions. An Post operates a current account but the vast majority of transactions are conducted online. Will a community bank be an exclusively offline offering? An Post has personal loans and credit cards and plans for the introduction of SME loans.

Mortgage lending is the other lending and an example best illustrates the point. For one mortgage for every post office in Ireland there is a capital requirement of €230 million, taking a round figure of 1,000 post offices. The average mortgage in 2020 was €230,000, so one mortgage per year for every post office requires a capital requirement of €230 million.

If every post office in Ireland has one mortgage per month, there is a capital requirement of €2.7 billion. That is 12,000 mortgages at €230,000 per mortgage. Some 12,000 mortgages are 33% of all mortgages issues in Ireland last year. I am not sure when a community bank or any bank can get to 33% market share but this is an illustration of the capital requirement and the challenge faced in terms of mortgage lending as a panacea for post offices.

I do not propose that customers attend the post offices to withdraw their cash and us getting the benefit of them lodging the amount they withdraw to pay the mortgage. One would expect those transactions would continue online.

We carry out identity verification for money laundering purposes which we are not paid for. It is one of the things we have asked be recompensed in a public service obligation, PSO.

The network provides across the counter agency banking services for some commercial banks. This will increase with the recent announcement from Bank of Ireland which we welcome. Having said that, transactions across the counter generated by a community bank have to dilute or replace the transactions we currently do. We cannot see how a community bank, which we are conceptually in favour of, would generate enough business aside from replicating what we currently do. We do not see it as a panacea for the post office network whatever about it being a panacea for the banking system in Ireland.

What does community banking do to the existing community bank? The credit union already provides a role for community banking in Ireland. Will the new community bank kill the credit union? The concept of community banking was the subject of a Government study in 2017 and a report of more than 200 pages was produced.

There was also a subsequent independent study carried out by Indecon and commissioned by the Department of Finance in 2019. None of the reports found that the proposals had merit. The pilot scheme proposed before the Indecon report did not even include post offices.

We are concerned that the pursuit of banking as a solution for the network will prove to be a distraction from the real issues and we suggest that there is much more merit in pursuing more tangible services. This includes ensuring that when the pandemic unemployment payments revert to jobseeker's payments they are mandated for collection through post offices or, as Grant Thornton proposed, establishing the network as the State on one's doorstep, and ensuring that communities have the option to access all government services through the network

I remind members of what Deputy Tóibín said in the Dáil debate, no less than three or four months ago, on 21 October 2020.

We have a choice here. One of the problems I have noted in my time in this House is that there are certain issues or topics for which every single Deputy will declare support, for the sake of the common good, with post offices and credit unions being two examples but when it comes to action and putting money where our mouths are, this Chamber has let down those organisations for generations. Rather than have everybody from all sides of the House saying nice things about the post office network, can we actually support this motion and make sure that there is money to pay for the continued existence of the network?

Why the urgency now? We agreed transformation payments with An Post in 2018 on the assumption that by 2021, new government services would be made available through the network, but none of these materialised. The challenge we now face relates to the delay in providing these new government services which were promised to us in 2018, but that are only now being seriously examined, following an announcement by the Minister of State, Deputy Naughton, to establish a new interdepartmental group to examine directing more business to the post office network.

It is too late for this. The network is facing a cliff edge at the end of June. Decisions must be made, and actions must be taken, before then. The Grant Thornton report warned of unrestrained post office closures after June 2021. Its analysis recommended an annual public service obligation, PSO, payment of €17 million, which, it is stated, would represent value for money for the State and provide a return of between €334 million and €776 million. The lower end of that estimate by Grant Thornton is 20 times the investment.

Currently, we serve 1.3 million customers; carry out 30 million social welfare transactions per annum; put €4.6 billion in cash payments into the local economy without any bank charges, which has a multiplier of two, as I said; act as a deterrent to fraud; and employ 1,409 full-time equivalent staff.

The IPU believes that the PSO should be in the form of an annual government retainer payment to be put in place from this summer with a commitment among all parties - the Government, An Post and postmasters - to expand the range of government services provided. Postmasters are ready, willing and able to provide many additional services with immediate effect. These have already been identified in previous reports produced by Mr. Bobby Kerr in 2016 and by An Post, the Government and the IPU in 2018, and include motor tax; licence renewals; registrations; identity verification, which we currently do unpaid; community information; and IT and office hub services, etc. Independent research carried out by RED C last year found that 86% of people supported the Government providing financial support to keep their post office open and 86% of people wanted more State services available at their post office.

The day of reckoning has arrived for the post office network and it is now about actions and not platitudes. The Government needs to act quickly and decisively to keep post offices open by ensuring a financial intervention is put in place before the end of June this year. If it is not going to do so, it should tell us so that postmasters can make up their minds on whether they will continue in business providing the service which everybody says that they want, but which nobody is prepared to pay for. Political backbone is needed to make a decision. We ask the committee to provide that political backbone. In comparison with the money that has gone into the banks, the investment in the post office network is minuscule. There is a return of between €334 million and €776 million. If no action is taken, the network will decline and disappear and people will wonder what happened.