Business welcomes calls for Australia Post to offer more financial services

Business representatives have welcomed reports the Future Fund is currently speaking with the Government regarding an expansion of Australia Post into the financial services industry.

The comments were made by Future Fund chairman David Murray, who said the services could be introduced to help the financially troubled postal network.

”Trying to find things to fill it up with… often results in a sub-optimal outcome… and the government would have to end up subsidising the existence of the network,” Murray told Fairfax.

Murray said the services could include providing deposits and loans, along with a variety of other services, including the processing of financial transactions and even selling super products. He also said Australia Post could open its own ATM network.

Cashstream chief executive Tim Lea says such an idea would be a fantastic development for SMEs, many of which are struggling under the lack of competition from banks. “I’m very supportive of the idea. I think it could be a welcome shot in the arm for SMEs,” he says.

“I think having Australia Post do that, in terms of distribution, that would be fantastic. SMEs need alternative sources of funding, and we’re finding that in some areas, there are complete lacks of alternatives to the banks. I think the idea could be a winner.”

“I suppose they would do a joint venture with a bank or something like that, that would provide the expertise and the credit systems and so on. That’s one of the avenues they could probably go down.”

Council of Small Business of Australia chief executive Peter Strong says he is supportive of the idea in principle, and that it would be a great initiative for growing businesses.

“We’ve got to see the detail, but I would be supportive of that measure because it would create something new, and competition in this area is a good thing. We’ve mentioned our support for the portable account number before, and this is a good example of a situation where you could use it.”

He says SMEs could make great use of such a service, which would cut down on the amount of time they would need to spend out of the office if they are able to take care of their postage needs and financial transactions all in the one area.

“In some parts of cities, you still need to drive to the bank and the parking is quite bad, it’s too far away from your other destinations and so on. But if you have an alternative post-office nearby, which could even be a smaller venue, you may find that it’s easier for you to go there.”

“I also think it will make it easier for some SMEs in rural areas where there isn’t a lot of competition,” he says. “On terms of ease of access, this will make it much easier for a lot of SMEs.”

Murray also points out Australia Post outlets don’t necessarily have to offer a limited range of products, saying that the network could offer services for loan documents and similar services.

”There are all sorts of thing in the funds management superannuation business, documents that need to be signed and lodged – it can be more than just a banking agency,” Murray said.

The comments also come after Australia Post announced it would expand its financial products by offering insurance last year.