LPOG Messages to Licensees – New LPO Payment Scheme

Licensees will have been very pleased to hear the news from Christine Holgate, on February 15th, to announce that agreement has been reached to finally start introducing stage 1 of the long-awaited payment reform.

Christine Holgate-LPO Payments- Announcement.pdf

As a licensee network, we make a vital contribution both to Australia Post as a business, and to the communities we serve. The new LPO Payments Scheme is an important milestone in this ongoing work that we provide to sustain our communities, and our LPO network all around Australia.

LPOG has worked extensively with Australia Post, and PIP (Partners in Performance as an outside party) to make the changes necessary to help protect the long-term sustainability of our licensee network. LPOG has been lobbying since our inception in 2013, to overhaul the payment scheme, so to reach that milestone is immensely rewarding for our foundation members, and growing Licensee members now onboard, after understanding over the last 5 years that if we don’t help ourselves, no one else is likely too.

It has been both challenging, and satisfying, for the LPOG team to finally participate actively in the consultation process undertaken over the past 14 months, prior to reaching in-principle agreement on the beginnings of the new LPO Payment Scheme.

In 1990, when the existing payment scheme was drafted, Australia Post’s core business was heavily focused on letters, hence the LPO Payment Scheme was structured with that focus around the letters work. The 1990 payment scheme is a flawed document, and did not stand the test of time, with almost zero flexibility, or provision made, for any adjustments to accommodate payment for the changing postal business, most especially the parcels side of the business that has been booming since the start of this century, and eventually started to swamp us all. Licensees have been hogtied under this antiquated scheme because of the lack of flexibility or reward for actual effort, instead we have been weighted down with numerous annual flat rate payments, that ended up as bottomless pits, with unlimited work expected for the annual flat rate payment.

It is sad to acknowledge that so many Licensees have lost their businesses, and their financial and emotional investment, over the past 20 years due to this absolute lack of provision and flexibility to meet the needs of the future business in the existing payment scheme.

The substantial changes to the payment scheme that have been agreed to, for this stage of the reform, will see the payments made to Licensees for most of the mail related services we provide for Australia Post and our communities, amended to better reflect the changing work efforts for the changing business, especially the booming parcels business. The mail management fee, historically an annual flat rate payment that neither rewarded, nor reflected the ever-increasing parcels work, will now be more aligned to letters delivery only. Parcels will now be paid on a per scan, both inbound and outbound, so if you do the work, it will be visible via the scan events, and you will see the payments in your POMs.

Finally, a parcel delivered by an LPO will attract the same payment, regardless of how it is addressed or comes into your LPO. This has been a massive pain point for LPOG, and most especially F Troop, so we are delighted to see this change for all the LPOs across the country.

LPOG, and Australia Post, have worked hard to create a stronger correlation between payments and work effort, and to create a structure that will see licensees benefit more directly from Australia Post’s business growth. While LPOG’s preferred measure of remuneration for LPOs will remain the return on expenses model, it is a credit to the new EGM, Nicole Sheffield and her team, who sat down with an honest and open agenda, almost as soon as she took up her new role in October last year, and we were able to find common ground that allowed progress and will see the majority of LPO’s payments improve, and potentially provide  that growth with Licensees now able to benefit by onboarding new products and services that will at last reward us for our efforts.

Australia Post will write to all Licensees formally at the start of March 2019, to provide the 90 days’ notice of the changes to the current LPO payment scheme, along with the full list of payment rate changes, as required under the LPO Agreement. 

Our existing payment scheme is a complex mix of many tasks, some linked to individual payments, and many just lumped in as afterthoughts. In order to understand the changes as they will relate to your own LPO, Australia Post will be providing every Licensee with a comparative dashboard that will show each Licensee how your LPO will fare from these changes.

The new LPO Payments Scheme represents significant changes for our LPO businesses, and Australia Post has committed to providing comprehensive support to help Licensees adjust and we encourage you to draw on this support. While most Licensees will see improved financial outcomes from this reformed payment scheme, there will be a small number of Licensees who will remain financially challenged due to a mix of reasons. Australia Post will be working with these LPOs over the coming months to determine a range of solutions for each LPO. No LPO will be worse off under the new scheme.

Australia Post has thanked LPOG for their invaluable contribution to this important and complex piece of work saying:

 “Although it is only the first step in the process of reforming the LPO payment scheme, we would like to recognise the dedication and valuable contribution made by LPOG to the payment reform consultation process, and your determination to reform the LPO payment scheme to benefit Licensees now and into the future”

LPOG acknowledges that the start of a reformed payment scheme is high on most Licensees ‘wish list, but there are many other pain points that still require extensive ongoing work.

We will continue to work together with Australia Post, and Licensees, to continue to secure sustainable outcomes that help protect the ongoing viability of LPOs and continue to provide benefits for Australia Post and our communities.


Angela Cramp

For and on behalf of the Board of LPOG and our hundreds of members who have contributed in every way to this milestone for the benefit of every Licensees.



Maxi's picture


Frankie's picture

Thank you so much:)

Well done, I'm grateful for the tireless work LPOG has done to bring us to this point. Huge effort.

Blimpgirl's picture

Nice work, LPOG! Much appreciated.

Great Job!
Thanks LPO Group!
Does this mean AP will remove Mail mangement fee for po box?Would there be also changes for the mail service fee for street mail?Do we still have the street mail delivery point and mail management fee?

LPOGroup's picture

Best to wait for the official notification for all the details. It will start going out in early March and then it will be very clear how this will impact your LPO. Without the details for your office it really is impossible to work out what these changes will mean for you, even if you did have the details.
Sandgroper's picture

We don't get paid MSP so hope like hell the MMF is not reduced as this is what pays for mail sort for the contractors.

goodykj's picture

Thank you for putting yourselves out there and going to the media several times. There has been a lot of gutsy efforts, and a lot of hard work. All your hours and angst are very appreciated.

Scott Evans's picture

Thank you LPOG Executive and helpers for the massive work to understand and argue for improved payments and a more sustainable business model.
It is such a pity that POAAL has been a negative for LPOs for so long and holding up this necessary reform.

gully's picture

Thanks to everyone who toiled away for so long to achieve this result. So much time and effort (and patience) put in by a few for the benefit of the many. Congratulations LPOG, and thanks again.

Bully's picture

Once again well done LPOG. It's a pity that the other mob are trying to lay claim to all the wins and hard work done by the board and dedicated LPOG shakers and movers. I for one will be asking at the next LEEP meeting how many times did POOALL attended the meetings and how is that they are laying claim to the work done and Aust Post are not saying something to get the record straight?

admittedly more money is nice but yet again they leave us in the lurch.
They not specific.
What are we celebrating again?
Told u so

seaview49's picture

I would like to thank each and everyone of your for your tireless work. Thanks for convincing AP. Glad someone in AP heard our plea and hopefully felt our pain as we have been struggling on a day to day basis to meet our expenses. We don't have a life. Saying that being in a small regional town. I love serving the customers and being an integral part of the community. We really are appreciated and we make a difference. I don't think corporate AP have any empathy and personal touch that we Licensees extend to our customers. Keep the flame burning dear committee and Licensees there is light at the end of the tunnel. I'm just waiting to see it in our POMS.

thanks for LPOG but we will wait and see

ASHA300's picture

Thats the problem, the light within the tunnel will have gone very dim by the time the payment is received.
And as with any payment AP extend, there is ALWAYS a cockup with it, and we will as per usual receive the POOP note, that we are sorry for the inconvienence, the correction will be rectified on your next POMS.

Thanks, thanks thanks, at long last some real progress.