Oireachtas Joint and Select Committees
Wednesday, 25 June 2025
Joint Oireachtas Committee on Arts, Media, Communications, Culture and Sport
Future of the An Post Network: Discussion
2:00 am
Alan Kelly (Tipperary North, Labour)
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We have received apologies from Deputy Brian Brennan and I wish to express our condolences to him on the passing of his mother. Today's meeting is an engagement with officials from the Department of Culture, Communications and Sport and representatives of An Post and the Irish Postmasters Union, IPU, on the future of the An Post network. From the Department I welcome Mr. Patrick Neary, assistant secretary, Mr. Ian Price, principal officer, and Mr. Anthony Treacy, assistant secretary. From An Post I welcome the chief executive, Mr. David McRedmond, the chairperson, Mr. Kieran Mulvey, and the managing director of An Post retail, Ms Debbie Byrne. I also welcome Mr. Sean Martin, president of the Irish Postmasters Union, and Ms Sandra Tormey, general secretary.
I propose to take the statements supplied to members as read. Is that agreed? Agreed. Before we proceed to questions from committee members I must clarify a number of matters. First, there was a request from one set of witnesses to appear before the committee separately and while that was understandable, unfortunately, due to the nature of the committee structure and the time that we have, it would be impractical to have a number of different sessions. We just could not fit them in. The number of committees in the Oireachtas now makes things very challenging. There is a broader range of committees and time is very tight, which will be very obvious as we proceed today.
I wish to clarify some of the limitations in relation to parliamentary privilege and the practice of the Houses as regards references witnesses make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to the Constitution and statute, by absolute privilege. This means that they have an absolute defence against any defamation action in respect of anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative that they comply with any such direction. Members are reminded of the long standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
We will now proceed with our questions and answers session. Members will have approximately six minutes each for both questions and answers. We are also joined by several non-members who have requested speaking time.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I thank all of the witnesses for being here and for submitting their opening statements. I note that in its submission, the Irish Postmasters Union has called for a five-year €15 million annual funding package for the post office network. My first question is for the other two groups represented here today. What is the position of the Department and An Post on the funding that is needed for the network and how that funding should be allocated?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I only have six minutes so I ask Mr. Neary to address the specifics of what the Irish Postmasters Union has proposed, the €15 million.
Mr. Patrick Neary:
It is currently €10 million, up to the end of this year. That was put in place in 2023. We have sought an extension of that scheme for the next five years through the NDP and are engaging with the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation in that regard. There is a process to go through, which is ongoing, for all capital allocations, including the current capital allocation, which will conclude with the budget this year.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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What is An Post's position on what funding is needed for the network and how it can be allocated?
Mr. David McRedmond:
Our position is that this is a matter between the IPU and the Government. An Post is just a conduit. We are very conscious that we do not receive State funding. We are independent and standalone and that is very important to us. At the same time, we recognise the pressures on the network. The network is superb but inevitably, with the decline of about 32% in transactions since 2019, it is under some pressure. It has taken on major contracts for agency banking with Bank of Ireland and AIB and that is really powerful. In terms of the funding, we would certainly support the IPU getting an increase in funding but it is not a matter for us. It is a matter for Government.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I appreciate that. My next question is for An Post and the IPU. From my reading of the Karshan ruling and from talking to people working as postmasters, it seems that we really need an examination of whether the status of postmasters as self-employed stands up to the legal tests that we now have. Was there any consultation with postmasters, particularly following on from the test provided by the Karshan ruling on employment status? Is there an appetite from postmasters who are currently classified as self-employed to become employees? Could that potentially help to fix some of the underlying issues of the feasibility of post offices as commercial enterprises?
Mr. Sean Martin:
We have had no discussion with the company in relation to the Karshan case but we have sought our own legal advice on it. From our point of view, there was a Supreme Court ruling back in 1999 which effectively says that we are contractors. We believe that we are contractors and unless we see evidence to the contrary, we will continue to operate as contractors.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Mr. Martin said that the IPU has not had consultation with the company. Is that correct?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Can I get a response from An Post, please?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Do the witnesses think becoming employees would help address some of the underlying challenges?
Mr. Sean Martin:
From our point of view, being an employee of a State body would be hugely important, but the question is whether we would end up going down a rabbit hole trying to achieve it. I think we would. We have far greater problems with the network than whether we are employees or contractors and we would much prefer to address them.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I thank Mr. McRedmond.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I only have one minute left to squeeze in one final question. As Mr. McRedmond referenced himself, An Post has put a lot into expanding the offering, in particular for financial products. He noted in his opening statement that there is a key new income stream for postmasters, which he believes strengthens post offices as a trusted hub within communities across Ireland. Have the members of the Irish Postmasters Union seen a benefit from the introduction of the new offerings by An Post? Could they elaborate on that?
Mr. Sean Martin:
We have. It has been hugely important. Agency banking has played a huge role in bringing a new clientele into the post office network. Within the constraints of what we deliver, banking itself is hugely important, but from the point of view of the overall income stream, it is worth about 5% or 6%. While it is important it is not hugely beneficial at the moment.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Does Mr. Martin feel there was effective engagement and negotiation in the process surrounding the expansion of services?
Mr. Sean Martin:
Yes. I think ourselves and An Post have good engagement and negotiations. We respect each other. We take different positions at times. They might not agree with us at times and we might not agree with them at other times, but our common goal is to achieve for the network of post offices and to ensure they become viable in the future.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I thank Mr. Martin. I appreciate I am over time but I ask that an opportunity be given to An Post to answer.
Mr. David McRedmond:
Yes, it is really important to us that these services work for An Post and for the postmasters, but ultimately that they work for the customers and that we make better services available. It is also true that a major part of the services that the network provides are Government services and some are up for tender at the moment and will be tendered. It is essential that An Post charges the right amount for those and that the Departments understand that there is a cost to a network. There is a network access fee which we must have in order to maintain the scale of the network so that we have post offices within 15 km in certain areas.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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There are quite a number of areas we could go in this regard. There are a number of post offices around the country where the postmasters and postmistresses say they are not viable and that without an intervention they will be getting out of the service. What is the scale of that? In my area of Bluebell, the post office closed. I know it is only a small area but the effect on the local community and the small row of shops was devastating. People now face the loss of a bus service to bring them to the nearest village of Inchicore. That is the effect in Dublin. The effect in a rural area is tenfold when a post office closes because there is not necessarily the availability of public transport. I understand the need to protect the service, but what is the level of crisis among those who are contractors?
Ms Sandra Tormey:
Currently, we have 108 postmasters who, when we take all the costs out, are earning less than the minimum wage. Recently, I polled my members and if the Government funding stays the same - at €10 million - 40% of them will have to close. We have had to absorb 30% minimum wage increases and 15% inflation. We cannot increase our prices to make our businesses viable. We cannot avail of any of the supports Government services give because the Government deems us as service providers not retailers so we are absorbing all these costs.
If the Government funding becomes €15 million, 70% of our postmasters say they can see a future for the next five years. We are looking for an uplift of €5 million. That is the difference between 40% of post offices around the country closing or 70% saying they have a future.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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This is a question for An Post. If 40% of existing post offices close, is there any onus on An Post to deliver the service if it cannot get a local contractor to take it on or to co-locate with another service? That is the difficulty, for instance, in Bluebell and in that vicinity. No other contractor or shop is willing to take on what they see as an onerous task.
Mr. David McRedmond:
I will ask Ms Byrne, as the managing director of the network, to answer in a moment. Broadly, we have a protocol which says that we have a post office within 15 km. It is to do with the social welfare of everybody. In the city, there must be a post office within 3 km. We are well above that level at the moment, so sometimes a post office might close, which benefits the other post offices nearby. One could have three post offices in an area, such as Inchicore or Phibsborough, and if one closes and the other two stay open - it is up to the postmaster to decide - then it makes the others viable. We will not fall below the minimum agreed level of having a post office within 15 km or within 3 km in urban areas or in a town of more than 500 people.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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How many post offices has An Post opened in recent years?
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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How many post offices were opened by An Post rather than by contractors?
Ms Debbie Byrne:
In terms of company-owned offices, we have 41. The strategy of the network is largely a contractor network. We have not opened any company-owned offices. We work very much hand in glove with postmasters. When a postmaster or postmistress retires, we advertise that on our website. We canvass businesses locally and actively approach people on the ground. We work with our own contacts in the grocery-retailer head offices. We are very active in either finding a new premises or if we find a postmaster who does not have a premise we will work with him to find one. An Post is very active in that regard. Since the Government funding was put in place two and a half years ago, the contraction in the network has completely slowed down. The Government funding has made a big difference. There is a small amount of natural attrition every year, but that rate has slowed down, which shows the funding the Government has put in place has helped secure the network for the customers.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I gave the example of Bluebell and the nearest post office is in Inchicore and people travel to it. The post office has already set up two hatches. If there is a sudden influx of a huge amount of new business then there is a need to employ extra staff. It is another matter if a building does not have extra space. Is there compensation from An Post to help post offices to adapt to the new business? Some of them do not even want the extra business, as they are happy with the level they are at.
Ms Debbie Byrne:
It is very important for us to help. In the case in Bluebell, where the business was consolidated into an office, we make sure the receiving office has the facilities to take the new business. We will not transfer it in there, for example, if there is only one counter in the office and the level of transactions would be too much for the office. Equally, we work with-----
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Ms Byrne said An Post will not transfer the business but what does it do if it has no choice?
Ms Debbie Byrne:
Often, there is a choice of perhaps more than one office. In some instances, we split the business across two or three offices where there is a density of offices. It is very much done on a case-by-case basis to make sure that the needs of the customers are served and that the transferring office, if one likes, is happy to take the business and the premises is suitable.
That is very important to us as well.
Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I hope it will not be 40% of offices transferring business at the same time.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I welcome the witnesses. I must put on the record that I am a postmaster. I am a member of the Irish Postmasters Union and I am a contractor of An Post. The post office has been in the family for 50 years in the community in Ballinalee, County Longford. It is important that the word "community" was mentioned because every single one of the 900-odd post offices is part of a community and central to them throughout the country. They are also central to the footfall of ancillary businesses in every single community. I refer to the community dividend post offices bring throughout the country. We must keep in mind the costs that would be on the Government for other supports if that network fell.
I am probably one of the 40% that would go if funding is not put in place. The €10 million allocation has not worked. As a postmaster, I can say that we need the €15 million. It is not just me who needs it but hundreds of other offices throughout the country – and hundreds of other communities. That is what this is about: it is not about Micheál Carrigy and probably 300-odd postmasters, it is about 300 communities that will suffer and lose the heart of their community. If that happens, other businesses will go with it. The investment of €30 million that was made two and a half years ago was a wise investment by the Government. I strongly believe that the €15 million, at a minimum, which has been sought is now required over a five-year period. There is strong support for that in the programme for Government. We must deliver on it. That is what I would say to everyone involved, in particular the departmental officials. The commitment is in the programme for Government, and we must deliver on it for communities throughout the country.
I have a couple of questions about additional services for all the witnesses, including the Department. Could I ask the Irish Postmasters Union and An Post what other new services we could perform on behalf of the State? Could they also comment on the commission we get for products? What will happen if the funding stops or if it is not continued? They are the figures and that is what people need to realise. If there are closures then communities will be affected.
Mr. Sean Martin:
Deputy Carrigy is dead right. This is about communities. This is not about post offices or about postmasters either. This is about 900 communities for whom post offices deliver on a daily basis. We commissioned an independent report from Grant Thornton, which reconfirmed the vital role played by post offices in communities, not just economically but also socially and environmentally. Their role is economic in that we hand out more than €7 billion in hard cash to local economies. That sustains local businesses and jobs and it creates the infrastructure that allows people set up businesses in rural Ireland and provide jobs. Socially, we provide a trusted face-to-face service, which provides social cohesion and also reduces isolation, in particular among the vulnerable, the most isolated and the elderly in society. The environment benefit is that by having services locally and by increasing them, we reduce the carbon footprint. We are about sustainability. The post office can deliver on that.
Deputy Carrigy's second question was about how much we receive for the products and what new services we could deliver. We can deliver an awful lot more for the Government, but we have been saying that for quite a while. I am not sure whether it is inertia, indifference or State administration that says we do not need to deliver more services. Our opinion is that we can deliver more services efficiently, effectively and locally. We could have form generation, so that every Government form could be available at the push of a button in the post office. That would stop us printing millions of forms across the country, which we throw out because there is a need to change a word or a price.
We could be involved with the register of electors, which is in disarray. We all know that 500,000 are not on it who should be on it and another 500,000 people are on it who should not be on it. We could play a role in that. We already play a role in ID verification and anti-money laundering, AML, requirements, so we are well used to being able to fulfil that role. We could also play a additional role in regard to the Department of Social Protection in terms of public service cards, PSCs, and being involved in people signing on and off. At the stroke of a pen tomorrow morning, we could all become peace commissioners. That would alleviate some of the administrative work done by the Garda, which would mean we could put the Garda where they are needed, out on the beat.
There is lots of additional work. Most post offices in rural Ireland act as tourist hubs already. Why not roll that out to every post office so we all become tourism hubs? There is a direct role for post offices to play in delivering for the Government. We can do that cost effectively.
In response to the point of what we get for the services, this is probably the nub of the problem: we do not get paid by the euro for the vast majority of services provided by postmasters, we get paid by the cent. I will give one example. Last week we handed out carer's payments of €2,000 to a lot of people who were in need of it. We got 65 cent for that €2,000. We had to secure the money when it came in, make sure it was right, make sure the correct person got it, count out the money and make sure the person was happy he or she got the right amount. That is the difficulty postmasters have. They are doing business for the Government but, unfortunately, they are paid in cent rather than euro. The Government must look at some of the contracts and see if there is room to improve.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Could I ask An Post what other business it sees that could be provided by the network? I know I am over time.
Alan Kelly (Tipperary North, Labour)
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There are 30 seconds left.
Ms Debbie Byrne:
The post office is really about that harp over the door, which means everything the Government can do and that interaction between the citizen and the Government. The post office can do everything that is available in the disparate array of offices consumers have to go into to interact with the Government. We have a very high-tech IT system that processes billions of transactions and we can do a lot more.
Alison Comyn (Fianna Fail)
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I thank the witnesses very much for coming in today. I do not need to tell them, as we have all heard already, about the importance of the post office to the likes of rural and regional communities. We have seen what happened when credit unions were removed or consolidated. It is usually the most vulnerable who are affected by that.
I was going to start with another question but, to be fair to Deputy Carrigy, I will pick up on the expansion of other services. Motor tax has been mentioned, as have general council services such as driving licence renewals and other such services. Are there any specific services An Post could mention that it is thinking of?
Ms Debbie Byrne:
Yes, the post office can do motor tax, and anything that involves a payment. We should at least be an additional payment office for services such as council tax, etc. That is one easy way of looking at it. The systems are there.
Before passports went online there was the passport express service. As the IPU said, it was very successful. A lot of services have been digitised. I do not think there is now any one individual thing that is going to be a silver bullet and put a lot of money into individual post offices but it is a collection of services involving being the front office for the Government. The printing of forms is a really big option and any licence applications to the Department of education, health or agriculture. We could group them under licence applications and payments and forms. The electoral register is a very interesting idea as well in terms of getting that right. We know how important that is.
Alison Comyn (Fianna Fail)
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I thank Ms Byrne. I will now turn to An Post. I have been contacted by a number of regional and rural postmasters over the weekend, knowing that this debate was coming up. They call it a pay freeze, but we will not call it that. There has not been an increment increasing their wages from 2008 commensurate with the other increases that have arisen such as the cost of living and the cost of rent, etc., whereas the staff have perhaps had increases of as much as 50% over that time. Is that fair or acceptable for postmasters not to have had an increase since 2008?
Ms Debbie Byrne:
I will take that question. There is a commercial rate card for the postmasters for services. Some of the rates have increased, so it is not true to say there have been no increases. There have been increases on certain product lines.
As we renew - for example, the Department of Social Protection contract tender is out at the moment - we will seek to have an increase and then pass on an increase. As we renew our contracts and as we increase the price of a stamp, for example, postmasters earn a commission based on that and on that price increase. There have been some increases over recent years.
Mr. David McRedmond:
As a principle, we, in An Post, want to support postmasters every bit of the way as far as possible. We want to pay them as much as we can pay them. We have an obligation to be self-funding and commercial, and we have to do that. We also have a public service obligation which we completely believe in and believe in every day. There is no intention within An Post other than to get postmasters as much as we can for the business and to increase the business so there is no difference there.
Alison Comyn (Fianna Fail)
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Does the chief executive believe he could run his offices for what postmasters are given to run their offices, especially self-employed contracted postmasters?
Mr. David McRedmond:
They are very different and that is not just in Ireland. I speak to my colleagues across Europe. Wherever there is a post office network, the company offices - whether it is An Post, the Portuguese postal service or whatever - are never as efficient. I cannot entirely explain why, but they just are not. I totally respect that postmasters are delivering more efficiently and are doing it very well. I am very proud to say that our company offices do a very good job as well but they tend to be a bit different and larger. I repeat that we do everything we can to increase the income to postmasters, for example by getting new banking services or new financial services. We are currently in discussions with the Department of justice.
Alison Comyn (Fianna Fail)
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I am conscious of time. I thank the chief executive for his reply. I will ask the representatives of the Irish Postmasters Union for a response. Is there a two-tier system?
Ms Sandra Tormey:
We cannot really be highly efficient because if we were, postmasters would not spend time looking after their customers, talking to them, ensuring they are not being taken advantage of by phishing scams, and ensuring all of our elderly customers are coming through and are there. If they go missing for one of the weeks, postmasters make follow-up calls to ensure they are all right.
Postmasters are paid on a fee-per-transaction basis so our problem is twofold. Yes, An Post wants more from the fees. We deserve more for the amount of work we are doing. As the president of the IPU, Mr. Martin, said earlier, AMLs are quite time consuming and the forms are quite complex to complete. With the transactions we need more. When we came looking for the initial funding of the €10 million, we were looking for additional services. We did not just want this as a subsidy; we wanted it as an investment.
We speak to the community. That is who we serve. Some 91% of the community know how critical postmasters are to them, and 89% want more Government services delivered through their post offices.
Alison Comyn (Fianna Fail)
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Would a reversal of the cut in the welfare transaction payment be useful?
Alison Comyn (Fianna Fail)
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That is probably a question for the Department if I get another opportunity to ask a question.
Alan Kelly (Tipperary North, Labour)
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If those who are not members of the committee wish to speak, they can approach the clerk to let us know and we can facilitate them after all the members have spoken. Two non-members have already done so.
Evanne Ní Chuilinn (Fine Gael)
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I thank the witnesses for coming in today. I will start with the IPU delegation because I want to follow up on some of the questions concerning the status of workers. To get an idea by way of background, do some people want to be contractors or would they rather be employees? What way is it working out? I ask because every organisation is different.
Mr. Sean Martin:
I am not sure. A small group of postmasters have taken a case to the scope section in the Department of Social Protection, which has informed them that as far as it is concerned we are employees. I reiterate the situation from our point of view. We have legal advice. It clearly states that as far as it is concerned, we are contractors. I am not sure that is a position we want to take. We would much prefer to deal with the Government and An Post around additional services and getting paid properly for them rather than going down that rabbit hole, as I have already said.
Evanne Ní Chuilinn (Fine Gael)
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I understand. I want to quote a response that the Minister for Finance, Deputy Donohoe, gave on 29 April to a parliamentary question on postmasters and the Karshan ruling. My question is really one for the Department. He said:
I am advised by Revenue that the TDM relating to Sub-Postmasters & Social Welfare Branch Managers will be updated shortly to confirm that the tax treatment of these individuals must be determined in line with the five-step framework as set out in the Karshan case.
The Karshan ruling, as we know, was a 2023 Supreme Court ruling which basically said that workers could not be treated one way for tax and one way for PRSI. Can our guests from the Department tell me if that is something that has been used and quoted by the Minister in respect of An Post, and if so, should it also be used and quoted in respect of RTÉ given that it is another State body?
Evanne Ní Chuilinn (Fine Gael)
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They are two State bodies. There is a lot of conversation in the two bodies around PRSI workers and contractors.
On the additional €5 million, it sounds like there is a lot to do and a lot that needs to be done to keep the show on the road. The digitalisation of communications poses challenges for the postal network so is the extra €5 million enough for everything that needs to be done? We are entering a new era and everything is going online. Is that a challenge?
Mr. Sean Martin:
The Senator is dead right; it is a challenge. Obviously the Government's policy is digital first but it cannot be digital only. That is what we have been saying, as Ms Byrne has said. We can be that state on the door. We can be that offline service for all Government services. There is a cohort of people who do not use computers, a cohort of people who cannot use computers, and a cohort of people who cannot access computers. There is a cohort of people who have computers but do not want to use them because they want to have a face-to-face service. We can deliver in spades for the Government. We have been saying this for quite a while. We need someone in the Government to say "stop" and let us look at what can be done, and there is a lot. As we have already said, there is a lot that can be done and the post office network can deliver for the State. It can be the front door for all Government services. If that does not happen, that front door will close and post offices will close one by one, and very quickly next year if the funding does not materialise.
Evanne Ní Chuilinn (Fine Gael)
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Did the witnesses say that 40% of post offices will close? Is that the figure?
Evanne Ní Chuilinn (Fine Gael)
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Are they mostly rural or urban, or is it across the board?
Ms Sandra Tormey:
Across the board. In 540 locations, the only banking facility within 5 km is what is offered in the post office. We have become the only face-to-face link to the State. If the State wants to stay linked to constituents and citizens, it must appreciate that every citizen in this country has a right to access cash and government services wherever they live. If post offices start to go, the community will have no link to government at all.
Evanne Ní Chuilinn (Fine Gael)
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I am not sure how much time I have left.
Alan Kelly (Tipperary North, Labour)
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I am keeping time remotely due to a failure of IT.
Alan Kelly (Tipperary North, Labour)
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The Senator has a minute.
Evanne Ní Chuilinn (Fine Gael)
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I have one question for An Post.
Alan Kelly (Tipperary North, Labour)
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It improves it, 100%. Everything can fail.
Evanne Ní Chuilinn (Fine Gael)
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Do not trust computers; it is a trap. I am conscious that we are talking about the future of the An Post network. Last year, in Dublin 12, we had an unfortunate situation when one of our postpersons retained a lot of post which resulted in people missing appointments, including medical appointments. After the fact a lot of post was found in a room of a house. An awful lot of people did not get post for months at a time. In terms of trust restoration, what has An Post done to ensure such a case does not happen again?
Mr. David McRedmond:
Yes, we are very apologetic about that. We have been very clear in the local community. We have worked with every single customer who was affected. I would say it is reasonable for us to say that such a case is very much the exception. We have the highest quality of service of any postal service in Europe in terms of our delivery network. I am very proud of our postmen and postwomen who showed in Covid just how important they value our communities. I can tell the Senator that there is nobody more furious whenever there is an instance of fraud.
With 10,000 employees, there will be occasional instances. We have a strong security department in An Post which investigates and looks at every single issue. I do not want to dismiss it as being not serious. It is extremely serious but it is not systemic or dominant.
Malcolm Byrne (Wicklow-Wexford, Fianna Fail)
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I thank the witnesses. The last point is very important. I realise there are disputes but we should be very proud, generally, of the postal service we have in Ireland. They are provided by postmasters and postmistresses, postmen and postwomen. It is important to start by acknowledging that.
There is a bigger picture around the challenges in many of our communities, particularly but not exclusively rural communities. They include a sense of the loss of services and also relate to connections to communities and so on. The post office has always been and will continue to be a vital part of that. There are immediate challenges but where will we be in five to ten years' time? The nature of the changing Ireland we see will involve the impact of changing urban landscapes and so on. I continue to see a role for the post office. I would argue it would be a community hub rather than the traditional post office. I am taken by the model followed in New Zealand. They lost a lot of rural services and the post offices took over. I want to paint a picture of the future. Let us say we get over the current challenges. How can we ensure a sufficient level of service delivery within rural communities to meet the changes coming in the next five to ten years? What measures do we need to take now on big picture issues to achieve that?
Mr. Sean Martin:
Normally, the business environment is for five years. Beyond that, from our point of view it would be difficult. Can the post office play a role in ten to 15 years' time? We believe it can. It can play an important role as the connection between Government, as the Deputy said, and the citizens and electorate. The Deputy is dead right. We are proud of what our members do on a daily basis and of the difference they make to so many people, including the marginalised and less well-off in society. The help they give them to get through the day is enormous. It is unpaid work and, in the words of Mastercard, it is priceless. For €15 million per year, we can ensure for the next five years - that is the horizon we can look at - that we have 845 post offices delivering in communities, as well as delivering for individuals, delivering connection, delivering for local businesses, delivering for the marginalised and, particularly, delivering for the State. That is the important thing. This is an investment, not a subsidy. This is an investment with a return - Grant Thornton has said this - of €700 million in social dividend to the Government. That is a huge investment. Is there a future for the post office network in five years' time? Who knows? We think we will still be important.
Malcolm Byrne (Wicklow-Wexford, Fianna Fail)
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The social role, bigger picture thing is broader than just postal deliveries. The question is who meets that.
Mr. David McRedmond:
Last year we exceeded €1 billion in revenue for the first time in the company's history. We have moved back into profitability after Covid. The company is undergoing a massive transformation. It is our green light strategy. We are leaders in technology and one of the leaders in this country in terms of AI deployment. We are the leaders in terms of sustainability. We see rural and urban as the same. We act for the common good and will provide extensive services. We have become an essential service because ecommerce is the biggest service now happening. People want things delivered. You can live anywhere in this State and get any goods, equivalent to living in Manchester, Boston or Paris. You can get anything because of the network we have and the service we provide. The post office network is one network. Our delivery network works hand in glove with it and delivers. I am really confident about the future of the post office network. There is always difficulty with mail volume decline but we are growing a load of services.
Malcolm Byrne (Wicklow-Wexford, Fianna Fail)
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The New Zealand model is a broader social model that could be considered. Has An Post thought about it?
Ms Debbie Byrne:
When we ask about the future of the post office, while services change and digitisation is increasing, we can group services under three headings. There is community banking and financial services and everything that goes with that. There is also ecommerce. We have a big cohort of new customers coming in through the circular economy. Vinted is a big part for us. The whole thing of sending and returning parcels means post offices are at the heart of ecommerce. We have talked of the role of the harp over the door for Government services. Within that Government services piece is the social and human piece, where Government continues to interact with communities. We need to evolve.
Post office colocation has been a big thing. Some 66% of the network is now colocated. We are also experimenting with new formats. In rural Ireland, we have two new formats going live later this year. That will involve a smaller footprint and lower set-up costs. They typically will have less cash going through, so some of the bigger paraphernalia found in the post office will not be needed. We will have to evolve with that. Self-service machines are being trialled and it is going very well, particularly for ecommerce. For pick-up and drop-off, people do not need to stand in a queue, but can scan a barcode and get a receipt. Technology will play a role there and help reduce postmasters' costs, where human interaction will work hand in glove-----
Alan Kelly (Tipperary North, Labour)
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I call Deputy Joanna Byrne.
Joanna Byrne (Louth, Sinn Fein)
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I thank the witnesses for coming in. I will start with the postmasters' union. Ms Tormey said postmasters are paid per transaction and are not paid a salary. She said most essentially work for around minimum wage and that, while they want more fees, they also need more transactions. The broader uplift of the additional €5 million aside, I will home in on the fees. The rates are obviously not sufficient or adequate at the moment. Has Ms Tormey identified the rate per transaction that would be fair to the postmaster?
Joanna Byrne (Louth, Sinn Fein)
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So there is no identification of a figure anywhere for the fees. It is a combined approach involving fees and transactions that is needed.
Joanna Byrne (Louth, Sinn Fein)
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If the witnesses will excuse me, I am also a member of the Committee of Public Accounts so I have to ask if a business case has been done that has identified €15 million as the figure needed. The Grant Thornton report was referenced. Is that a business case or a business study, specifically?
Mr. Sean Martin:
In 2022 Grant Thornton did a bottom-up analysis of the network and it felt at that stage that we needed €20 million.
The difficulty is if we look for €20 million from the Government, that has to get European approval. That would take too long and the vast majority of our offices would close. Without Government funding being increased, there will be unrestrained closures throughout the country, rural and urban, of up to 40% of offices in January next year. Some 400 post offices may go because the Government will decide it does not believe communities should have those services.
Joanna Byrne (Louth, Sinn Fein)
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There is no specific business study. Is it just the Grant Thornton report?
Joanna Byrne (Louth, Sinn Fein)
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If the funding stays at €10 million, 40% of post offices will close. That would mean 60% will stay open. If there is a €5 million uplift, I think Mr. Martin said only 70% would see a sustainable future. Is that right?
Joanna Byrne (Louth, Sinn Fein)
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A sum of €5 million is not a guarantee for a huge percentage.
Joanna Byrne (Louth, Sinn Fein)
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The IPU is advocating for a range of services. We went through some of them today, such as form generation, tourist information and voter registration. I wish to tease through in more detail the expansion of the role of postmasters as peace commissioners. There is no cost to be made a peace commissioner and fees cannot be charged for the service. Will the witnesses explain why that is part of their lobbying and how it feeds into the-----
Mr. Sean Martin:
We want to see value for the Government and for the citizen. We are saying to the Government, for that extra €5 million, we can deliver alternative services and government services. One is peace commissioner, for which we will do some of the work for nothing. We are happy to do that because we will deliver a service for Government for which the Government pays us in relation to that investment.
Joanna Byrne (Louth, Sinn Fein)
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It is more like an holistic approach to broadening government services among postmasters. Mr. Martin spoke about tourist hubs. Has the IPU engaged with Fáilte Ireland or any other State body involved in tourism promotion regarding involvement in tourist information? It is an aspiration at this stage or has the feasibility been assessed?
Mr. Sean Martin:
It is an aspiration at this stage but probably 30% of our post offices have been part of a tourist hub where people come in and they direct them to where the walks are, where to eat etc. We do that already, unpaid. We are asking why not use all of the network to ensure there are tourist offices? In Tramore, where I am from, there is only a tourist office for two months of the year. We have a good offering in Tramore for the other ten months.
Joanna Byrne (Louth, Sinn Fein)
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I do not doubt. I wanted to know if there has been engagement with State bodies that might support it.
Joanna Byrne (Louth, Sinn Fein)
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The Future of Media Commission in the previous Oireachtas term recommended a move away from the TV licence to Exchequer funding for An post. How would that affect post offices? Has An Post assessed what remuneration it might lose if that happened?
Ms Debbie Byrne:
Payment of the TV licence through the post office network is a key payment channel for TV licences. Outside of that, we operate the whole TV licence operation. There would be a twofold impact on the staff involved and the transactions for postmasters. We are an active part of that commission going forward in looking at the future of TV licences. We very much see a role for post offices in gathering funds.
Joanna Byrne (Louth, Sinn Fein)
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Have the figures of the loss been assessed? If not, can-----
Joanna Byrne (Louth, Sinn Fein)
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Can that be provided to the committee?
Alan Kelly (Tipperary North, Labour)
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I have some questions and then we will go to other members. When will a decision be made by the Department, approximately, on the proposal put forward by the postmasters' union?
Alan Kelly (Tipperary North, Labour)
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The decision on the €15 million will be around then.
Alan Kelly (Tipperary North, Labour)
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Do not take this the wrong way. Mr. Mulvey and Mr. McRedmond have been around the block a bit as regards being in different to organisations. They know the workings of government. I mean that in a good way. They said they would be supportive of what the postmasters put forward. Has that been put in writing to the Government?
Alan Kelly (Tipperary North, Labour)
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Would Mr. Mulvey mind if we request that they do so in writing, if that has not been done? If he has-----
Alan Kelly (Tipperary North, Labour)
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Will An Post supply the committee with a copy of that correspondence?
Alan Kelly (Tipperary North, Labour)
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Will An Post update that correspondence and send a copy of it to the committee so that we can deal with that issue? Based on what colleagues have said, it seems the social component is the issue. How is the social component of post offices measured? How can that be done in a way that makes them financially viable? It is an intangible service. Trying to put a value on it is difficult. From An Post's point of view, how is the social component, which is not all transactional, community-based - when I was young, my mother was the stand-in postperson in Portroe. I had to go and deliver the post as a young teenager. Committee members are finding out a lot of different things about me in this role. How can we ensure the Government understands the community role? The closure of 40% of post offices is not acceptable. There are already other closures. Is it the case that until we have the NDP timeline, which is now October, current closures should be stopped? The very model could change if the Government supports what the postmasters are saying and what An Post says it supports. It would be very unusual if the Government did not support it. Should we be looking at a pause on closures until then?
Mr. David McRedmond:
If it is within the protocol, which is that there are more than 500 people in the area or there is no other post office within 15 km, we will advertise and keep it open. We will do our best to keep every post office open. There will always be one or two that close and that will continue to happen. It is often because of families or whatever history. We have no plan to close post offices between now and October or between now and 2027.
Alan Kelly (Tipperary North, Labour)
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How many post offices owned by An Post are closing?
Mr. David McRedmond:
We are transferring some of those post offices - six are under way - to contractor offices. That is because that is more viable, strengthens the network and is more financially viable for the longer term. There is often understandable concern within a community. They say we are closing this post office and we say it is going to move into the Centra. They say it will not be as good and they do not want it. Whenever we do it, after we have done it, it gets the highest scores in customer satisfaction, customers liking their post office and what it does for the community. It really works as a strategy.
Alan Kelly (Tipperary North, Labour)
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On offices owned by An Post that are closing, I presume An Post offers these offices to other State agencies before they go on sale commercially or publicly.
Mr. David McRedmond:
I think we are the only company that has a responsible divestment programme, which we put in place last year. I thank Fergal Burke and Kat Hanna of Avison Young for helping us with that. Within that programme, we always offer a site to the LDA first. If the LDA is not interested, we then offer it to the local council.
Alan Kelly (Tipperary North, Labour)
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Could Mr. McRedmond give us an example? What is happening with Rathmines?
Alan Kelly (Tipperary North, Labour)
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I understand that. It is actually quite a big one.
Alan Kelly (Tipperary North, Labour)
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Did Dublin City Council want it?
Alan Kelly (Tipperary North, Labour)
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Yesterday, the Minister for justice, sitting where Mr. Mulvey is now seated, said there was not a fair of distribution of asylum seekers in particular LEAs in Dublin. Has it been offered around the State as regards everyone else?
Alan Kelly (Tipperary North, Labour)
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May I make a suggestion that this committee recommend that An Post does what it is doing regarding the LDA and the local authority, but it should then offer it to the State and general State agencies? They should be given time and, if necessary, the property should subsequently go to the market. It would be a better way of dealing with things because there would be other options out there.
We will now move to other Deputies and Senators present and then go on to a second round. The first non-member of the committee to contact us was Senator Fitzpatrick. She has three minutes.
Mary Fitzpatrick (Fianna Fail)
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I thank the witnesses for being here today. I thank the postmasters before us and those around the country for the service they provide. It is an incredibly valuable service. The sum of €14 billion in transactions last year does not in any way quantify the quality of the human, social and community service that members of An Post provide. I congratulate Mr. McRedmond and An Post. The post office and postal service have been innovating since the 1700s. He is right; it is the oldest franchise. It is a gold-standard service, and the performance of Mr. McRedmond and the organisation speaks for itself.
My questions are for the Department. Unfortunately, in my lifetime, far too many postmasters and people in my community have come to me with the fear that their post office will be removed. Almost ten years ago, postmasters were preparing to stand in the general election campaign of 2016. I appreciate the commitment that is in place. This Government and previous Governments have been very clear. The funding and the subsidy have sustained close to 900 post offices. What is at the core here, however, is not just the service and the community value, but the quality of employment for the self-employed postmasters. The two big costs in a business are the cost of wages, and energy costs. Everything else flows from there.
The Department is bringing a proposal to Government. I wish it well with that. I wish that the proposal was coming sooner, because making our postmasters wait until the budget in October is really putting them under pressure with a deadline of December. I appreciate that negotiations are going on, but will the witnesses speak about the innovation the Department is looking at to not just put in place a solution for the next five years, but beyond that in order to avoid another cliff? I appreciate there are contractual issues that may dictate the five years, but we must look beyond that.
Mr. Patrick Neary:
A scheme is in place. We have heard already that it has been very successful in slowing down anyone leaving the network itself. The Government is strongly supportive of the continuation of a similar scheme. The submission we received from the post office network referred to a sum of €15 million. As the Senator said, we are very much engaged with other Departments in terms of securing a scheme that will sustain the network. It is in the programme for Government as a priority, and our submission and the support of our Minister reflect that strongly.
On the future of An Post and the post office network, we are very closely engaged with An Post on its future strategy. We have a very strong corporate governance team that works hand in glove with it on the future of An Post as it evolves. We heard earlier that it is a very dynamic market and significant changes are coming into it. That puts pressure on change and on looking at new areas of either Government services and parcel delivery while the mail volumes and other transactions are declining. We are working very closely with An Post on its strategy and future strategy. We are supported by other Government agencies in that engagement. To say what the future will be beyond five years is probably a little bit of a stretch for us now. I know An Post's strategy, published last year, looked out for the coming five years and we are very much engaged.
Conor McGuinness (Waterford, Sinn Fein)
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I am the Sinn Féin spokesperson on community development, rural affairs and the Gaeltacht. I see every day in my own life and in my political practice the value of the network and the value to local communities, both rural and urban, of an accessible service that offers a level of quality and has an impeccable record of trust and recognition. In many communities, not just rural ones, it is the only front-facing public service available to them.
Those of us who attended the briefings last month heard and read the stark warnings from the postmasters' union about closures. We have already seen closures across the State, particularly in my own case in An Rinn in Gaeltacht na nDéise, the west Waterford Gaeltacht. The new contract offered by An Post to postmasters or people considering becoming a postmaster is closure by stealth. It is an attempt to reduce the network by stealth without saying post offices will be closed. I think the words used were "natural attrition". People retire. People come to retirement age and are entitled to their retirement. People retire and those post offices cannot be maintained because it is not an attractive prospect and the contract is not viable or sustainable. Does Mr. McRedmond agree with my reading that it is closure by stealth?
Mr. David McRedmond:
No, I do not, but I thank the Deputy for his comments and his support for the network. I certainly do not agree with his reading. The contract is a good contract. I respect that the postmasters' union will have its view of it. There are also many very viable post offices. The key for us is to have a viable network. Populations change, people move and things shift. Things cannot be preserved in aspic; a network has to be developed, moved and changed. We have brought on so many new services. Looking at the agency banking alone, the banks retreated from rural areas and An Post is now effectively the bank. We will do what we can on any other services that we think communities need and which we can offer through the network. I certainly do not accept that characterisation. The network's revenues actually increased last year. The network is doing reasonably, but that is notwithstanding what the postmasters' union has said, which is that there are some who are really under pressure, which is why that funding is important.
Conor McGuinness (Waterford, Sinn Fein)
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With respect, my question is particularly about new entrants and the new contracts. In an existing postal operation, when the postmaster retires, the feedback to public representatives, which I am sure Mr. McRedmond has heard, is that it is not an attractive prospect.
Mr. David McRedmond:
It is a prospect that many take up. It is very much based on the strategy of co-location, such as in a retail store. That works particularly well because there is a crossover of traffic. The store gets more traffic from post office customers and vice versa.
That is part of the business mix to make sure that we are viable for the long term, because that is our aim. I accept the concern of Deputy McGuinness but I have to emphasise we really have a good commercial contract, a good business and a good network. We have issues that need to be fixed and issues that need to be dealt with but there is no intention other than to encourage people to come into the network.
Michael Murphy (Tipperary South, Fine Gael)
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I thank the Chair. I am sorry for being late. I was chairing the transport committee but I really wanted to be here to show solidarity with the network throughout south Tipperary.
To be clear, there are 845 postmasters and postmistresses. Roughly, what is the average age? I assume they have a big challenge in terms of people retiring and nobody willing to take on the business. For me, social cohesion is what it is all about. I just want to acknowledge the extent to which the postmasters and postmistresses are a positive force in the community.
I acknowledge something Deputy Malcolm Byrne talked about, that is, what the vision for ten years' time is. I like this idea of transitioning into community hubs and digital hubs. That is where the future is, but right now it is about survival of the fittest.
I want to ask the Department whether there has been any analysis to determine how closures or reduced hours have impacted on older and isolated people. Has there been any analysis of how post office closures impact on economic and social cohesion? Social cohesion is what is it about for me. What price do we put on social cohesion? For me, €15 million is not nearly enough. One cannot put a figure on that. I see the impact of the post office network in my constituency. I have seen some post offices close. The average age of our postmasters and postmistresses concerns me. The best way to encourage a new generation of postmasters and postmistresses is to look after the current generation of postmasters and postmistresses.
I would like to properly understand the viability question and see some examples of the business and financial model of a typical local post office. Mr. McRedmond talked about how some of these rural post offices were still in the ownership of the post office and about possibly selling some of them because they would be more viable in the private sector. I am struggling to reconcile that with the real viability issue that we talked about in terms of the postmistresses and postmasters.
Has there been any analysis done in terms of the rural isolation issue? It is about social cohesion. The Government and the Department have to step up to the mark and recognise that we can frame a long-term vision, but it is about survival in the short term, social cohesion and what price we put on it. A figure of €15 million is not nearly enough.
Alan Kelly (Tipperary North, Labour)
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Who does the Deputy want to answer the question?
Michael Murphy (Tipperary South, Fine Gael)
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Anyone, starting with the average age and the viability question.
Alan Kelly (Tipperary North, Labour)
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Thirty seconds for Mr. Martin and 30 seconds for An Post.
Mr. Sean Martin:
The average age, obviously, is towards the elderly. That will pose a problem for the network going forward.
In relation to viability, I am not so sure there are many post offices viable out there, whether big, small, medium, urban or rural. I will give three quick scenarios. We probably have 200 post offices with revenue of €25,000. They have no staff costs other than four weeks' holidays. They will come out with a net profit of €19,800. They probably do in the region of 20,000 to 30,000 transactions a year and handle €1.25 million. If we look at an €80,000 post office, there is one staff member along with the postmaster. With total costs of €49,000, it comes out with €30,650. It handles 150,000 transactions a year and €5.5 million in terms of money handed out. An office with revenue of €150,000, with two-and-a-quarter staff along with a postmaster and net costs of €114,000, is coming out with €35,100. None of these post offices is really viable.
Alan Kelly (Tipperary North, Labour)
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Does An Post want to say something briefly?
Mr. David McRedmond:
I would say that there is a focus on the request of the IPU for €15 million. Government services are really important. We need Government services, whether that be the Department of Social Protection, the NTMA or whoever those services are from, to pay a fee commensurate with the service that is provided. We pass that increase on to the postmasters. We have to get some ourselves and we pass on to the postmasters. That is an extremely important way to improve the viability of the network.
The Deputy asked about the company offices. We have 46. They tend to be in bigger areas. They tend to be more in cities than rural areas.
Many postmasters make a very reasonable income, and make a good income. It is a good business, but some really struggle because they are in areas that are depopulated, etc. That is the difference.
Mattie McGrath (Tipperary South, Independent)
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Apologies for being late. I welcome the two lots of speakers. I wish Mr. O'Hara all the best in his retirement and Mr. Martin the best in the future. It is a good model to have both An Post and the postmasters here because for years we have been talking to both and the two never seemed to add up.
I salute the postmasters and postmistresses and, indeed, the fir an phoist and mná an phoist throughout the country. The service they give is enormous and incalculable in its value to the community and social cohesion.
To take up what Mr. McRedmond was saying, in south Tipperary alone, the post office in Tipperary town recently divested into SuperValu. The office in Cashel is gone into SuperValu. Indeed, we have lost Ballingarry. We have lost Kilsheelan. We have lost countless of them, for instance, Clogheen. It is not viable for a business owner. Maybe it is fine for the big SuperValu because it has space. We have a shop in Clogheen where a man was very interested in taking over the postal service but An Post put too many restrictions on him. It was going to cost him too much and take up too much of his shop, and the security implications of it are massive. The amount of money post offices handle has been outlined. That is not fair for any young businessman. He is an excellent businessman in Clogheen. He was very interested. The community wanted him to keep it but he just could not financially and it would have had too much of an impact on his shop. An Post has too many expectations. An Post is closing offices by stealth. There is no question about it. Where someone puts up a hand and is interested in retaining a post office in a village, An Post has too much bureaucracy, red tape and expense. Mr. McRedmond cannot get away from that one. That is a fact. An Post is closing by stealth. We know the number there was when I came into the Dáil 18 years ago and the number that is there now. They are dwindling.
We have been talking forever about giving Government services but we do not get them. The Government is taking money away from the post offices and encouraging social welfare to be done online. That is happening all the time. I have raised letters in the Dáil Chamber with different taoisigh where people have been told to do that. We need to pony up here. They both need to go to the Government and the Government has to go and deal with them, not just pay lip service.
As for the IPU's ask for moneys, as Deputy Murphy said, you could not buy the value of the service post offices give for that and the amount of services that they are willing to offer. The twain do not seem to be able to meet. Mr. McRedmond might address my assertion that it is clear as day that they are closing by stealth.
Mattie McGrath (Tipperary South, Independent)
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An Post is doing it.
Mr. David McRedmond:
We have closed very few post offices in the past couple of years. We did a few years ago. To strengthen the post office network, we closed 150 post offices in 2018. We did that very publicly and it strengthened the network. The postmasters benefited from it. Indeed, many postmasters supported it. Some would have been against it but many supported it.
We are constantly working to maintain a stronger network and a good network. I would say one thing about this. The bit that is missing is, when I talk about the Government paying more for services, the Government could not digitise those were it not for the networks. Banks could not digitise because they are obliged to contact customers. It is because of the postmasters who look after those who do not want digital that those services can be done, so it is a very effective spend by the State to support the network.
Mattie McGrath (Tipperary South, Independent)
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I disagree with Mr. McRedmond because in that case in Clogheen alone, it was too prohibitive. I refer to the costs and the space taken up in a small shop. It is different in the SuperValu stores. They are working well there and I thank SuperValu for engaging and keeping the service. In a small shop, the costs, security implications and so on are excessive. An Post cannot get any young people. I refer to smaller- or medium-sized shops. This is not a small shop. The shop is bigger than this room but the post office would just take up too much space. An Post is-----
Alan Kelly (Tipperary North, Labour)
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We will come back to that, Ms Byrne. Deputy Gibney is next.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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To get back to the issue of employment status, we hear a lot about the uncertainty of the post office network. As Mr. McRedmond said, postmasters can close up whenever without any guarantees. In that context, has An Post explored the idea of a scheme which would allow An Post to run the post office and directly employ people?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I am asking about closures or potential closures.
Mr. David McRedmond:
No. When I say we are a business I do not mean we are a business in terms of having to make profit but as being something that is required and needed. We have a huge number of post offices. If one is not needed, it is better for the other two post offices nearby if that post office closes.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Has An Post done that in terms of the viability of self-employment as a potential solution for the prevention of closures.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Sorry, I meant the viability of direct employment as a potential solution for the prevention of closures. Is that something An Post has analysed?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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When Mr. McRedmond says it is not viable, was the analysis done externally or was it an internal review?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I appreciate that. It was really just in that context.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Are there any ongoing cases with An Post related to bogus self-employment?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Mr. McRedmond mentioned that An Post is a leader in terms of AI deployment. Is that correct?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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What policies and safeguards does An Post have in place around the dangers of AI?
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Mr. McRedmond cannot even tell me the specific risks which are prominent within the An Post network in regard to the deployment of AI.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Mr. McRedmond said earlier that An Post was a leader in the deployment of AI. I think those were the words used.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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He does not know the risks of AI.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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I am referring to An Post's deployment of AI.
Mr. David McRedmond:
There can be risks in relation to data and data breaches. They are the principal risks. There are also risks related to the fact that a lot of AI is very new and one cannot be 100% certain of the information, so one has to declare if one has used AI. Most businesses face these risks.
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Has An Post made any connection between the deployment of AI and the potential of the provision of Government or State services? That would be one of my major concerns.
Mr. David McRedmond:
The provision of State services is a matter for the State. For example, with the Department of Social Protection, the big shift for it, leaving aside AI, is that it has simply moved to electronic fund transfer, EFT, for a lot of what it has done. However, it wants to keep some services with An Post precisely because it is better to have a jobseeker turn up to collect his or her income. An Post returns a lot of income that is uncollected and otherwise would not have been returned if it had gone through EFT. That is an example of-----
Sinéad Gibney (Dublin Rathdown, Social Democrats)
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Decision-making is the other area where there would be major concerns. On the point that the audience An Post reaches are people who are not as technically and digitally literate as the mainstream population, I would be very cautious and concerned about the deployment of AI. It is important to see AI in that context. It is very difficult for people to access justice, for example, if there is decision-making that is out of their reach. It is very difficult to pin down decision-making within AI processes. Obviously, there are decisions made around the provision of State services at every point in the chain, regardless of whether it is the Department of Social Protection making the original decision. An Post should be very much aware of that in its risk mitigation in respect of AI.
Mr. David McRedmond:
I take that point on board and we are absolutely aware of it. An Post will not put at risk any of our customers, or indeed our postmasters and staff, through our use of technology. We use technology to be more efficient and to be better but we are very careful about it. I take on board what the Deputy said.
Alison Comyn (Fianna Fail)
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We spoke at length about social welfare and the massive part every post office plays on behalf of the Department of Social Protection. I will pick up on an earlier comment I made related to the Irish Postmasters Union and the cut to the welfare transaction payments. Is it possible to quantify that?
Mr. Sean Martin:
As An Post said, there is a new contract out for the delivery of social welfare for the next couple of years. The Irish Postmasters Union hopes the Department will look favourably on that and increase the rates applicable to postmasters because without increasing those rates, we will face irreversible closures and once a post office is gone, it is gone.
Alison Comyn (Fianna Fail)
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I will ask that question of the Department. Where is the Department in that process and is there a timeline for it?
Alison Comyn (Fianna Fail)
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Looking to the future then, we mentioned that a lot of postmasters and postmistresses are close to retirement age. What are the succession plans? Are there particular innovation or succession grants available to attract people to come into this area to prove it is not closure by stealth?
Ms Debbie Byrne:
I will take this question. Postmasters and postmistresses retire and it is An Post's job to work to replace that contract. To give the Deputy an idea, we had more than 60 resignations last year. We work with businesses on the ground to replace those and we fulfilled and replaced the vast majority of those 64 offices last year. This shows that in most cases there are people willing to take on the contract. Some see it as an extension of a shop, etc. A resignation does not mean a closure. We just have to work hard with the community and various retailer groups to make sure we replace that contract. We very much see that as An Post's role and we work diligently on that.
Alison Comyn (Fianna Fail)
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Is An Post going far enough to attract new postmasters and postmistresses?
Mr. Sean Martin:
It is becoming more and more difficult to attract people because the figures just do not add up. It is becoming less viable, even as an alternative with regard to the shop. People look at it in terms of the responsibilities they would have and the revenue they would get from it. I can make more selling ice cream and coffee than the return I would get if I put a post office in a shop and took on all the responsibilities around that. It is becoming more and more difficult. That is a decision for the Government. The Government needs to decide whether we want to keep post offices and, as Deputy Murphy said, we want to keep social cohesion going. There is a cost to that. That cost of €15 million is very reasonable. Is it value for money? Yes. Can the post office deliver more? Yes. Again, that matter is in the remit of the Government. Much of what we are speaking about relates to whether the Government is prepared to stand up and deliver for post offices. More important, is it prepared to deliver for communities?
Alison Comyn (Fianna Fail)
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Mr. Martin mentioned value for money. How much does the Exo Building cost to run per month and is that the best value for money for An Post?
Mr. David McRedmond:
First, we had no choice because the GPO is no longer fit for habitation. It needs significant repair. A few years ago, the cost of that was assessed at €70 million and An Post did not have €70 million to invest. We had no choice but to relocate. The rent for the Exo Building is reasonable. It is something over €7 million per year. That is a market rent and it is reasonable. What it has done for An Post is quite extraordinary. As an e-commerce, a financial services and a digital company, we can now look forward and ensure we bring the post office network and our delivery networks into the contemporary age.
We now have a business that is very forward looking and dynamic. I can tell the committee that the Exo Building was the best value for money, considering what it has done for staff and our partners with big companies, such as Amazon and Vinted, which will be essential to keeping the post office network open. When they come to visit us, they see a company that is forward looking, progressive and working hard, and with which they want to partner. It has been one of our better investments.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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I apologise for leaving the meeting but I was co-ordinating another event. If I repeat a question that has already been asked, I also apologise.
The future is dependent on the €75 million in funding to sustain the post office network and, I will say again, to sustain communities. We are in a digital world. Some would say that the post office network has become obsolete, represents the past because we do not use it and will be gone over time. What would the witnesses from An Post, the IPU and the Department say to that statement? I hear that coming back.
I also seek the views of the witnesses from the Department on an issue I looked at previously. Social welfare payments paid through the post office network are secure. Social welfare payments paid into bank accounts via electronic fund transfers, EFTs, are not-----
Alan Kelly (Tipperary North, Labour)
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I ask all members to respect the member who is asking the question. I ask them to listen. What they are doing does not look good on television.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Payments into the post office network are secure and cannot be collected by somebody illegally. If the Department wants to bring back a payment, a stop is put on the system and the payment can be sent back. I remember looking at the figures a number of years ago when, on average, €65 million per year was returned by An Post to the Department of Social Protection in respect of payments that were uncollected or where there were issues. If I ask about payments that were returned by the banks, and a higher percentage of payments go through the banks, I expect the figure to be zero. Paying that money through the post office network, while it might be more expensive, is saving the State tens of millions of euro. That is a fact. I ask for comments on those points.
Mr. Sean Martin:
The Deputy asked if the post office was relevant or important. In our opinion, it is. It is a national asset that delivers vital community and Government services and will continue to do so. It has more than 1 million customers per week. It is now probably the only bastion where there is access to cash. As we all know, cash is still important in Ireland. It is important to customers. In particular, people who live hand to mouth use cash because they cannot afford to use a bank. Is the Government now saying we will not need to look after those people in the future? I do not think we are saying that and hope we are not.
We all understand that the digital divide exists. We understand the post office, which, as has been said at this meeting, is a trusted public institution. It is where people feel safe and trusted. They want to do their business in a physical environment and face to face. We can continue to do that. As we have said, physical goods are still going around the country. The volume is ever increasing. We need a physical footprint for that. More important is the post office's resilience in a crisis. We saw during the Covid-19 pandemic that the post office was the only State institution that remained open 100% of the time to deliver for our communities. We want to continue to do that.
The post office is an investment from which the Government gets a return. It is not a subsidy but an investment because the Government will get a return of up to €700 million per annum. We hand out €7 billion per annum. The economist, Jim Power, said previously that the post office network was a multiplier of one or one and a half. It provides a significant social and economic dividend for the Government. Let us not-----
Alan Kelly (Tipperary North, Labour)
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We will go to the witnesses from An Post.
Micheál Carrigy (Longford-Westmeath, Fine Gael)
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Can we hear from An Post and the Department? I thank the Cathaoirleach.
Mr. Kieran Mulvey:
As chairman of An Post, I can say that we have every confidence in the future of the post office. Over recent years, under Mr. McRedmond and his management team, we have seen considerable success against extraordinary competition. We are in a highly competitive environment, particularly for parcels. That is a significant growth area for us. We operate on a multiplicity of fronts. It is not just about maintaining the post office network and the products that go through it. There is also the centralised delivery of mail parcels throughout the country, including Government services. There are requirements, including compliance and regulation, that go with that, between ComReg, the Central Bank and the Department.
As Mr. McRedmond indicated, we passed the €1 billion mark this year. A significant programme of change will take place over the coming years. We believe it will enhance and solidify An Post for the future. We want to be a good commercial State company that provides a significant social service to the State. We want to maintain that image. We have a good brand and a good name. We want to be in a space where we are in a position to match competition, not just within the country, but internationally. All the multinationals operate here. They all see the post office as viable for parcel delivery and financial products. A number of significant developments will be announced.
Alan Kelly (Tipperary North, Labour)
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I ask the witnesses from the Department to come in briefly.
Mr. Patrick Neary:
It is clear that the Government recognises the social benefit of the post office network to communities. A direct subvention is already in place. We talked about extending it beyond this year and are in the process of doing it. It is a changing sector, with mail delivery declining and the number of parcels increasing. We have heard about other Government and in-person services. Financial services will be a strong part of the future of the post office network.
Cathal Byrne (Fine Gael)
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I thank the committee for facilitating my making a few brief points. The post office network is close to my heart. My grandfather spent his entire working career as a postman delivering the post in rural areas of in Cork, Kerry and Limerick.
I have a number of questions about the future of the network. One of the key things I have been struck by is the range of Government services currently provided by other Departments that could be rolled out to the post office network, as happens in other countries. There are some key examples. I am interested in hearing feedback as to whether this is something that could be done in Ireland. Is it something the witnesses would be willing to consider? What stage are we at in terms of moving to providing these facilities in post offices? In Australia, for example, the equivalent of the public services card is provided through the post office network. Also in Australia, a lot of work has been done around the electoral register and facilitating record keeping in that regard. In France, renewal of driving licences can be done through the post office network. Those are some key areas and services that should be available. That is the first part of my question.
There is a €15 million proposal to ensure the future viability of the post office network. The taxpayer will put forward that money. Will there be increased services as a result or is it simply to maintain what is currently available in the network as it stands? Does that figure allow for closures, particularly in rural areas?
Ms Debbie Byrne:
The Senator mentioned three Government services that, over the years, we have campaigned around. We said earlier that anything that involved a payment to the Government can be facilitated through the network. The same is true for any licences.
We would have to put in new equipment for photo capture to do TV licences. We did an assessment on that previously and found that while we could not have offered it in 900 post offices, we could do so in the top 450. We looked at the business case previously with regard to putting in cameras and then seeing whether they could be used for something else.
We are speaking about post offices providing offline services for those less digitally literate. There is a seriously sophisticated IT system and equipment behind the post office network, which allows it to do the €14 billion in transactions it does every year, and that infrastructure is there to be scaled to do other Government services. I absolutely agree that we need to make it simpler for citizens to interact with the State so they do not have to go here, there and everywhere during hours that do not suit them. They could have an office of Government on their doorstep where they could come in to do their business with greater ease between 9 a.m. and 5.30 p.m. six days a week. A lot of offices are not open over these hours. I echo what Mr. Martin said in that we are the only State body that was open throughout Covid. Intreo offices closed and we picked up the slack. Bank branches closed and in the west of Ireland, even at a time when we did not have an arrangement with Bank of Ireland, we stepped in. We were there, as were the postmasters, to serve citizens. The network and technology are there to do more.
Alan Kelly (Tipperary North, Labour)
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I want to return to the issue in Rathmines. When it was offered to the LDA and Dublin City Council, was it free, was it to be kept on An Post's books as a lease or would those bodies have had to pay for it?
Alan Kelly (Tipperary North, Labour)
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It was a nominal amount.
Alan Kelly (Tipperary North, Labour)
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Would it have stayed on An Post's books or transferred to the other body?
Alan Kelly (Tipperary North, Labour)
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I find it extremely strange that Dublin City Council would not take it.
Alan Kelly (Tipperary North, Labour)
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Will Mr. McRedmond write to us with regard to Dublin City Council?
Alan Kelly (Tipperary North, Labour)
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I have a question for Mr. Mulvey. Is there a policy for the social media activity of senior executives?
Alan Kelly (Tipperary North, Labour)
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Will Mr. Mulvey supply it to us?
Alan Kelly (Tipperary North, Labour)
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I thank Mr. Mulvey. A question that has been raised regarding that topic.
Ms Byrne spoke earlier about experimental formats and she never got to close it off. Briefly, what are they?
Ms Debbie Byrne:
It is in recognition of the more rural post offices. At the bottom end of the network there are probably 300 offices where transaction levels are lower. Earlier we spoke about viability and how these are the ones that are less viable for postmasters. In August, in Bonniconlon in Mayo, we will trial a new format called "post office express". The transaction levels there are quite low and we have struggled to keep an office in the area. A counter will go into a retailer. There will still be privacy for the customer but it will not have much of the back-office structure that perhaps a larger post office would. We are confirming where the second office will go.
Alan Kelly (Tipperary North, Labour)
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Is the plan to roll out more of these?
Alan Kelly (Tipperary North, Labour)
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I presume they will be in more disparate rural areas.
Alan Kelly (Tipperary North, Labour)
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That is a positive step.
I met the postmasters a number of weeks ago. I was very taken by a number of their recommendations and suggestions, such as the idea that they would all become agents and be able to sign forms rather than people having to get a peace commissioner. That is a no-brainer. It is a great idea. It is often the case that people have to find somebody. I do not know how this would be facilitated through payments from An Post or how it would be valued but it is a great example of social value. Of all the components the Irish Postmasters Union has put forward, is there any with which An Post does not agree? Would the witnesses like to say so publicly now or forever hold their peace?
Alan Kelly (Tipperary North, Labour)
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There is nothing on the list of recommendations the union has put forward, either here publicly or to An Post, that An Post would have an issue with.
Alan Kelly (Tipperary North, Labour)
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That is excellent.
There are several other issues. I have to say as Cathaoirleach that we will make recommendations as a committee. We will put forward our views on where this goes. With regard to the social element, as a country we are getting to a crunch point for the post office network. We will have to put some value on how we want to maintain it. Effectively, there will have to be a social subsidy. The Department and the Government are at a critical point with regard to how that will be manufactured and measured. A number of the witnesses have some influence on the Government and I encourage them to go there.
We need a mechanism to encourage the postmasters to provide this; it cannot be just ad hoc. It is not just about transactions. When it comes to the social element, and how the Government would effectively manage a social subsidy in some way that would be within the parameters of EU law and Irish law, the data to support it must be very clear on the potential volume of people who would use these new services. We need to do some work on a recommendation to cross it over to the Department and to An Post, or work with An Post on it. I believe that at €50 million An Post is selling itself short. I do not think that amount would get within an ass's roar of what is required, if I am being honest about what I have just said with regard to a social subsidy. We are at a juncture.
I am a regular visitor to Ballinskelligs in Kerry. My wife is from there. There is a post office in a shop. I presume it is cross-subsidised because it is in a shop. I do not think it would exist otherwise. There has to be a Gaeltacht speaker. The value of such an isolated area having access to the An Post network is immeasurable. My local post office is in Newtown, the next parish to me beside Portroe in Tipperary. It looked after my mother and father, who has just passed, so incredibly well over the past ten or 15 years. It is impossible to put a value on how the post office looked out for them as people in their 80s. We as a country, the Government and the Oireachtas, working with An Post, are at a juncture whereby we will have to have a step change in how we value this service in a changing Ireland, how the services can be elevated, changed and added to and how we can deliver a legal social subsidy, which will be immeasurable into the future. As a committee we will have to make these recommendations. I do not think there is any difference politically across the board on this. We are all more or less in the same category.
On that basis, I thank the witnesses for their time and for coming today. I thank them for their interactions, their honesty in their answers and the detail they have given us. They have given us an awful lot of food for thought and I thank them for it. I now ask them to withdraw as we will go into private session to deal with a range of issues.