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.
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.
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.
Well DONE LPOG