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

An Post and postmasters have recognised that in order to remain relevant to the needs of local communities, the network needs to move with the times. While offices might look traditional on the outside, the network has experienced some significant developments, the most significant of which is that it is now fully computerised. This investment was necessary, as post offices now operate in an increasingly competitive environment and face challenges from other retailers with electronic payment options and from online payment channels. The national payments strategy envisages the increased use of card payments in order to align our payments infrastructure with that of competitor countries. Financial institutions and utilities can make significant savings in switching customers to online channels and many are aggressively doing so.

An Post has responded to these changes and, to be fair to the company, the network has come a long way in the past ten years. The investment in computerisation has broadened the range of services which can be offered to customers and increased the number of organisations which are prepared to do business with An Post. In order to illustrate the scale of the changes, I will briefly list some of the services now available which have been introduced in the past ten years: banking business with AIB and Danske Bank such as cash lodgements which generate over 4 million transactions per year; foreign exchange for cash and card transitions; and One for All gift vouchers. It is also worth mentioning that State savings worth €17 billion, which represent over 15% of household deposits in Ireland, are handled by the network. Again, the extra business has translated into increased payments for postmasters, growing from €55 million in 2003 to €79 million in 2012.

In addition, the post office network secures about €126 million worth of business from the Government each year. The most significant contract is that with the Department of Social Protection. I understand from my colleague, the Minister for Social Protection, Deputy Joan Burton, that An Post has been selected as the preferred bidder for the social welfare payments cash contract. This is very good news for the network as, in addition to the social welfare payments, much of the bill payment and other revenue streams flow from the social welfare business. The fact that An Post won the contract after a competitive process augers well for the future of the post office. As I have mentioned, the reality is that electronic payments options will become the norm, including for welfare clients. Strengths such as automation, the physical scale of the network and the strong ethos of customer service will allow An Post to continue to be involved in welfare payments and I understand it will pitch strongly for e-payment business when it is put out to tender.

With the social welfare contract secured, continuing to build on the strengths of the network to obtain extra business is the next step. I agree with the Oireachtas joint committee's report that there is scope to generate more business from the financial services sector and the Government. The report recognises that extra business will be won through a tendering process or that business is offered to all players with point of sale facilities.

The model operated for the payment of the property tax also brought a new concept to the post office, namely, user charges for making payments. While I understand these charges are not popular, they represent a fairly simple way of generating extra business and, by extension, extra revenue for the network. After all, customers clearly value the network and the access it provides. While the social dimension is important, the economic reality is that individual post offices are not viable unless the postmaster can make a living from the business. If the payment of a small user charge helps to secure the future of individual post offices, I doubt that many customers would begrudge it.

The public sector reform agenda being pursued by the Government includes the use of outsourcing options in some circumstances. I have written to my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, to suggest the post office network is ideally placed to service more Government transaction services. I understand An Post has met officials from that Department to explore options.

I agree with the Oireachtas joint committee that An Post should have a strong input into the roll-out of the basic bank account as many of the potential users of these accounts are already customers of An Post and know and are comfortable with using the post office. Again, I will continue to remind my colleagues, in particular the Minister for Finance, Deputy Michael Noonan, that without the post office network, it is difficult to see the adoption of these accounts gaining major traction. When I addressed the postmasters' annual conference in May, I mentioned they also had a strong role in improving customer experience such as extended opening hours, where appropriate, and improved layouts, especially as the amount of cash throughput decreased in offices.

The post office network is the largest retail network in the country. In a network of that size, inevitably, there will be closures and I understand the upset this can cause in local communities. It would be fair to say the process adopted by An Post where a post office was to be closed was less than transparent in the past. In response to my efforts with An Post and pressure from the Oireachtas joint committee, a new protocol for closures has been introduced. It has been used six times in the last year and given local communities a greater say on whether a post office should be retained.

I again thank the Acting Chairman for the invitation to address the House. I welcome the publication of the report of the Oireachtas joint committee and the opportunity it gives to discuss the future of the network. I am interested in hearing the views of the Members of the House.