Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

This is the second opportunity we have had within the past couple of weeks to discuss the report of the joint committee on the future of the post office network. I discussed it recently in the Seanad.

It is clear that the role played by the post office network is held in high esteem throughout the country and among all the political parties. Another significant report on the post office network, which was commissioned by the Irish Postmasters Union, compiled by Grant Thornton and published last year, contains some interesting proposals with regard to the direction the network might take in the future. I agree with the thrust of the report compiled by Deputy O'Mahony's committee. The committee examined the current configuration of the network and the importance of Government contracts and its report contains suggestions in respect extra business opportunities for post offices. The pivotal role post offices play in communities, in both financial and social terms, is acknowledged in the report. Post offices act as a financial hub and as front offices for Government and utility providers and serve as a social hub for local communities. In the Upper House, a number of Senators urged that we should divert more Government contracts to the post office system. I am entirely in agreement with that general proposition but what was suggested must be done in accordance with procurement procedures. The latter must be acknowledged in the context of the strictures under which we operate. A common-sense approach to improving the viability and sustainability of the network is reflected in the recommendations contained in the report before the House. I am pleased to say that many of the suggestions put forward may have already been adopted, at least in part, by An Post.

The local post office is seen as a stalwart and unchanging part of the Irish landscape. An Post and postmasters have, however, recognised that in order to remain relevant to the needs of local communities, the network must move with the times. While offices may appear fairly traditional on the outside, the network has experienced some significant developments. Foremost among those development is the fact that the network is now fully computerised. Post offices operate in an increasingly competitive environment and face challenges from other retailers with electronic payment operations and from online channels. As a result, the investment in computerisation was timely.

One of the points made in the Seanad - this offers potential for the future but I am not sure it is being pursued as aggressively as might be the case - related to basic bank accounts. As Deputies are aware, in recent times An Post has engaged in diversifying its business, creating and offering new products to the public and reaching arrangements with particular banks, such as AIB and Danske Bank. This is the way of the future. The fact that the network has been computerised represents a major step forward. An Post was recently successful in winning the contract to handle half of the cash payments made by the Department of Social Protection to its clients. As that Department moves towards an electronic-transfer-of-funds model, challenges will arise. An Post will be as entitled as any other entity to bid for the business in this regard but even if it is successful, there will be less of a margin in respect of such business than is the case at present.

There is no doubt that An Post faces a number of challenges. As a result of the availability of e-substitution, its core business is in decline. However, it has managed to create new products and attract new business. It is modernising its network and its brand is trusted throughout the country. I am concerned, however, that when the electronic transfer of funds takes over, and even if An Post is successful in winning the relevant tenders, the yield, from a business point of view, will be lower than is currently the case. There are challenges but An Post has a solid brand and there is significant support for it.

My colleague, the Minister of State, Deputy Fergus O'Dowd, will reply to the debate. I understand he has agreed to share some of his time with Deputy Penrose.

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