Australia Post is required by law to provide a universal letter service which is reasonably accessible to all Australians and, in addition, to provide a standard letter service at a uniform price (currently 55 cents) from anywhere to anywhere in the country.

This means the cost of delivering some letters can be many times higher than the postage charged. The CSO cost occurs when the real cost of delivery exceeds the charge for the service.

The cost of meeting our CSOs in 2007/08 was estimated to be $104.3 million. This amount is funded by earnings from the reserved services (letters up to 250 grams) within Australia Post’s letters business.

Australia Post does not receive any taxpayer money from the government to meet the cost of CSOs.

A summary of Australia Post’s CSOs

Australia Post’s Community Service Obligations (CSOs) are set out in Section 27 of the Australian Postal Corporation Act which requires that:

• the corporation provides a letter service for both domestic and international letter traffic
• the service be available at a single uniform rate within Australia for standard letters
• the service be reasonably accessible to all Australians wherever they reside, and
• the performance standards for the service reasonably meet the social, industrial and commercial needs of the community.

Performance standards

Section 28C of the Act details the particular CSO standards Australia Post is required to meet. Performance against these standards is independently audited and detailed in our Annual Report. These are detailed further below.

Lodgement - Maintain at least 10,000 street posting boxes

Delivery timetables

Same State

* Metro - next business day
* Metro to country - second business day
* Between Country areas - second business day

Interstate

* Metro to metro - second business day
* Between metro and country - third business day
* Between country areas - fourth business day

On-time delivery - Deliver at least 94 per cent of standard (non bulk) letters according to the above timetable.

Access - Maintain mail lodgement points at 4,000 retail outlets (2,500 in rural and remote areas).

Retail outlets to be located so that:

• in metropolitan areas at least 90 per cent of residences
  are within 2.5 km of an outlet
• in non-metropolitan areas at least 85 per cent of residences are within 7.5 km of an outlet.

Delivery frequency

• 98 per cent of delivery points to receive deliveries five days a week
• 99.7 per cent of delivery points to receive deliveries no less than twice a week

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