Australia Post is required under the Australian Postal Corporation Act 1989 (the Act) to meet a performance standard of 94 per cent on-time delivery. This year, we again exceeded that target, with 95.6 per cent of domestic letters delivered on time or early. Nearly all of the remaining 4.4 per cent of letters were delivered by the following day.

Letters is the only area of our core business that is a partially protected service. Under the Act, letters weighing 250 grams or less – or priced below $2 – are reserved to Australia Post. In return for this protected service we are required to meet a series of community service obligations, all of which we met or exceeded in the 2005/06 financial year.

Our delivery performance figures are measured against timetables outlined in the regulated standards and are independently audited.

Monitoring service performance

This year Australia Post made some major changes to the internal and external monitoring of its delivery service performance. We installed radio frequency identification (RFID) technology that will enhance our ability to monitor our service performance and provide a better analysis of potential problems within our delivery network.

Previously, all external monitoring was done manually. In the new system, the monitoring company inserts RFID tags into test letters through the course of each month – with more than 12,000 tags being recovered and reused on an ongoing basis.

Monitoring equipment, and new computer hardware and software (which will detect and register the RFID tags in test letters as they enter and leave our facilities), has been installed in all nine of our metropolitan letter processing facilities, in 21 country mail centres, in 23 delivery centres and in 16 mobile units.

Research International, which provides similar services for a number of postal administrations around the world, is monitoring our performance, and international audit firm Deloitte Touche Tohmatsu will provide quarterly and annual independent certification of that performance.

Whereas the previous system measured our overall postal performance, RFID technology will also provide intermediate measurement points throughout the journey of test mail items. This detailed information will enable us to better identify and solve any problems that arise within the mail network.

The old and new monitoring systems were run in parallel for six months, with the new monitoring service taking over completely from July 2006.