Communications Regulation (Postal Services) (Amendment) Bill 2016: Second Stage

I move: "That the Bill be now read a Second Time."

I am pleased to have the opportunity to present this Bill for the consideration of the House. First, however, I want to extend apologies on behalf of the Minister, Deputy Naughten, who unfortunately has been unable to attend the House today. I would like to wish him a speedy recovery following his cycling accident over the Christmas period.

This Bill is a relatively short legislative proposal, the purpose of which is to repeal section 30 of the Communications Regulation (Postal Services) Act 2011, which sets out the mechanism for regulating postal pricing within the universal service using a price cap mechanism.

The mails business is undergoing a profound structural change both here and internationally. Electronic substitution has had a significant impact on the letters business, while also providing opportunities for growth in parcels. This development is particularly apparent in terms of large volume postal customers such as banks and utility providers.

The trend, which has been evident for some years, accelerated in 2016 with An Post recording a doubling year-on-year volume decline, resulting in a serious financial impact for the company. In addition, the impact of a 2.5% Labour Court pay recommendation has added further pressure to an already delicate financial situation. Each 1% decline in mail volume equates to a loss of revenue for An Post of €4 million and a 1% increase in pay adds €4.5 million to payroll.

The mails business still generates almost two thirds of An Post’s revenue and represents 78% of company payroll. That explains why the volume decline and Labour Court award has had such an impact on the company’s financial base.

Gabh mo leithscéal, a Leas-Cheann Comhairle. Is the Minister of State distributing copies of his speech?

I have just asked for them.

Thank you very much.

As I mentioned, internationally the mail and post offices businesses are experiencing long-term structural challenges and this is not just an issue solely related to An Post. One of the main elements of the postal service in Ireland is the daily delivery of post to every address in the State. The Government is extremely cognisant of the value placed on this service by communities in both rural and urban areas, and recognises the importance of ensuring that An Post has the capacity to continue to fulfil its obligations in this regard.

Clearly, the company is entering a period of significant change to cope with the rapidly changing environment in which it operates. In this regard, it has started a fundamental review to identify the strategic changes and restructuring necessary to maintain it on a sound financial footing. The Government supports this review fully and an outcome to it is expected early in the second quarter of 2017.

The Government accepts that the company requires some financial headroom to implement the findings of the review while continuing to deliver on its universal service obligations. In consequence, the Government has agreed to introduce this Bill as a matter of priority to repeal the price cap mechanism. This is the most viable option to support An Post in the short term while a restructuring plan is being implemented. This is not a decision which was taken lightly. NewERA has conducted an in-depth review of the company in recent months on behalf of the shareholding Ministers and has confirmed the seriousness of the situation it faces. In addition, the Minister, Deputy Naughten, met with the chairman and CEO of An Post, ComReg and representatives of the Communication Workers Union to discuss the matter in detail. Having considered all matters, the Minister acted swiftly in taking appropriate action.

The impact of the legislation will involve a substantial increase in the price of the stamp. As it stands, Ireland falls well below the European average in terms of stamp prices and it is expected that proposed increases will bring the price in line with European norms. Cognisant of the impact such a measure might have on consumers and the SME sector, the Bill also provides that the Commission for Communications Regulation, ComReg, will undertake a review of the consequences of the repeal of the price cap mechanism after a two-year period. ComReg will report to the Minister on its findings within six months. The Bill also enables ComReg to undertake such consultation as it considers appropriate in carrying out this review. In addition, the Minister will issue a policy direction to An Post instructing it that the price increases introduced following the repeal of the price cap mechanism must be subject to prior consultation with the ComReg and have due regard to the tariff principles set out in section 28 of the Communications Regulation (Postal Services) Act 2011. These principles must be complied within the provision of a universal postal service and include the following requirements: prices must be affordable and such that all users can avail of services provided; prices must be cost oriented; and tariffs must be transparent and non-discriminatory. Under the 2011 Act, ComReg has a role in ensuring compliance with the tariff principles outlined in section 28.

Consideration must also be given to the impact on personal customers and the SME sector. It is important to remember that An Post provides a high quality mail service to Irish business and personal customers across the country. The mail network undertakes the delivery of 2.5 million mail items every working day to 2.1 million homes and businesses. It includes 7,620 collection, processing and delivery staff, 160 local delivery units, and four national mail centres. The company has a number of strengths such as its brand and nationwide reach. Significant work has been done by Mr. Bobby Kerr on the post office network which has resulted in a number of recommendations around network renewal. It is expected that these will be considered in the context of the strategic review of the company. An Post is also a significant employer with over 9,000 staff. Payroll costs amount to €40 million per month which also includes payments to postmasters who run the bulk of the post office network. Despite the difficult financial situation, I want it to be clear that there is no threat to the mails delivery or the universal service obligation. An Post will continue to deliver post to every address every working day, which is an EU requirement. The amended approach to pricing aims to ensure that An Post can continue to fulfil this obligation.

I will now outline the main provisions of the Bill. For the convenience of the House, a detailed explanatory memorandum has been published and this provides a synopsis of the provisions. The Bill is relatively short and consists of three sections. Section 1 provides for the repeal of section 30 of the Communications Regulation (Postal Services) Act 2011, which provides for the price cap mechanism. The section also provides that any price cap decision within the meaning of section 30 will cease to have effect. Section 2 provides for an amendment to section 10 of the Communications Regulation Act 2002 to enable ComReg to carry out a review of the consequences of the repeal of the price cap mechanism in section 30 of the Communications Regulation (Postal Services) Act 2011. In this regard, the functions of ComReg, as set out in section 10 of the Communications Regulation Act 2002, as amended, are amended to enable it to undertake this review. This review is to commence two years after the coming into operation of the Communications Regulation (Postal Services) (Amendment) Bill 2016. ComReg will report to the Minister on its findings within six months of the commencement of the review and the Minister will lay the report prepared by ComReg before each of the House of the Oireachtas as soon as practicable. In addition, provision is made to enable ComReg to undertake such consultation as it considers appropriate in carrying out the review. Section 3 contains general provisions relating to the Short Title, commencement, collective citation and construction.

It would be prudent to have legislation in place to give An Post pricing freedom by the end of the first quarter of 2017. As it stands, An Post must give one month's notice of its intention to increase prices. As such, there will be a delay before a price increase can take effect even after the commencement of the legislation. In light of the seriousness of the situation facing An Post, it is important that mechanisms are in place to facilitate the introduction of price increases at the earliest possible time. I look forward to hearing the views of the House on the Bill, to a constructive Committee Stage debate and to the assistance of Members in facilitating its early passage into law.

Fianna Fáil will support this vital Bill which offers a valuable lifeline to our post office network. There will be another opportunity to address the difficulties faced by the post office network such as the one we had yesterday evening at the joint committee where we met all the stakeholders.

With 1,130 post offices around the country, An Post is Ireland's largest retail network and one with considerable reach into some of Ireland's most underserved communities. It is one of our most vital assets, particularly in rural areas where post offices have long since served as informal community centres and hubs of administration. Post offices are where we go not only to send post or to pick up our pensions, but to catch up with neighbours and to hear the local gossip. For many people living in rural Ireland, the post office is one of the few places where they can still go to socialise and meet other people. Post offices offer a particular sense of security and a feeling of not having been forgotten, something which is especially important as we see more and more rural Garda stations, pubs, and community centres being forced to close their doors.

Unfortunately, most of us are familiar with the difficulties experienced by the An Post network, particularly in recent years, as we have seen the population shift from rural to urban areas. The advent of digital technology combined with this Government's neglect of the network has left many branches struggling to make ends meet. Between 2011 and 2014, there were 24 net closures and, indeed, since 2014, a further 16 offices have closed. This means that in just five years, approximately 3.5% of our post offices have had to close their doors. I have met many of these postmasters and postmistresses who, despite every effort to the contrary, have been forced to close the doors of their post offices. For these people and the people that they have spent decades serving, the decision to close a post office cannot be taken lightly or ignored. It is devastating and has caused a lot of anxiety for people around the country who are running and relying upon post offices in their various guises. As such, we are all in agreement that something must be done to save our post office network.

In its programme for partnership Government, the Government pledged to act swiftly on the recommendations of the post office business development group and to take a number of immediate actions to ensure the sustainability of the An Post network. These recommendations were very much welcomed when they were announced. Fianna Fáil has been persistent and explicit in its calls on the Government to meet these promises and in this regard we have not been alone. The wider An Post network, the Irish Postmasters' Union, and several other organisations have joined us in demanding that the Government take meaningful action to preserve the post office network.

Over eight months after the Government entered office, we are still awaiting action on the post office network. In this regard, I welcome the Bill being brought before the House as it is the first real action we have seen on the issue in a long time.

We cannot allow the Government to rest on its laurels should the Bill be successful as the support the Bill can offer to An Post is insufficient. As it stands, mail delivery services represent a limited and ever-dwindling portion of An Post's business. This is due to an increasing number of companies and bodies using means other than the postal delivery service to get information and bills to consumers and an increase in the use of electronic means of communication.

An increase in stamp price can be expected to accelerate this process. Clearly, the law of diminishing returns will apply. I am not entirely convinced of the numbers I have seen. The diminishing return will be greatly exacerbated as a result of this necessary decision.

We have reached a point where the unsustainability of the An Post business model has been widely acknowledged, not least by the Bobby Kerr report commissioned by the Government. The report, which estimated that up to 500 more post offices can be expected to close unless we take decisive action, outlined a number of measures that could be used to diversify An Post's business model and to provide for its continued survival. The Bobby Kerr report offers 23 recommendations that will facilitate the expansion and diversification of the post office network and ensure its long-term financial viability.

We debated the report in the House about a year ago, so I will not delve too far into its details. However, I will restate that it was a strong and positive report. It offered real and specific solutions to the issues faced by the post office network and paved the way for us to move forward. This is all that a report can do. It cannot change legislation to allow An Post to change, nor can it work with shareholders to implement some of the reforms it recommends. That is up to those who sit in this Chamber, in particular those on the other side of the House who commissioned the report.

Almost a year after the publication of the report, we are awaiting the implementation of its proposals. Anyone with a rudimentary business knowledge knows that when faced with diminishing profitability, one must act as early as possible to minimise losses. Running up additional losses will not help us to make the network more sustainable and financially viable in the future.

It is of deep concern to Fianna Fáil that the Government has yet to recognise this point. We have offered it numerous ideas on how the post office network might be best supported and preserved, yet it continues to rest on its laurels, apparently unconcerned, but the heart of our villages and towns is under grave threat.

We welcome the move to remove the price cap that is currently enforced on stamps. Ireland’s stamp prices are currently about 21 cent below the European average of 93 cent, so it is no surprise that the post office network has been struggling to deliver a mail delivery service without experiencing significant difficulties. Throughout its mail network, An Post delivers 2.5 million items every day to 2.1 million homes and businesses. To do this, it employs 7,620 collection and delivery staff, who operate out of 1,130 post offices around the country. This is a very serious operation, and while I understand that An Post has been working hard to reduce losses in this area, it is necessary to raise stamp prices in order to ensure the future sustainability of the An Post delivery service.

This being said, a 10 cent or 20 cent rise in stamp prices is not a silver bullet for the An Post network. Over the past decade, mail delivery has been an increasingly small share of An Post’s overall revenue. Since the peak of mail in 2007, we have seen a 38% decline in mail delivery, and my understanding is that this trend is set to continue as businesses and personal customers find new means of communicating and doing business. For better or worse, we cannot reverse the tide on this and it is up to us to work with An Post to find new and innovative means to adapt to these changes in communications technology. Indeed, with specific regard to a potential price increase, we need to be highly conscious of how a price rise will impact on existing customers, from small to medium enterprises who may find other means of contacting their customers to rural customers who have fewer options.

In this sense, I welcome the provision in the Bill for a review to be conducted in advance of any price change to allow us to assess the potential impact of any change. It is important, however, that this is not used as a self-preservation mechanism for the current government, and allowed to stretch on for months without any real action being taken. We have seen this with regard to other working groups and reviews in the context of An Post’s reforms, and we cannot let it happen once again.

Unfortunately, the Government’s disregard for the post office network goes beyond inaction. It has also threatened actions that would have a seriously detrimental effect on An Post. For example, in 2014, at a time when the post office network was facing increasing challenges, the Department of Social Protection was actively encouraging people in receipt of welfare payments to use electronic and bank-based systems to receive their payments. Given that social welfare payments make up about 30% of An Post’s revenue, it does not take much to recognise that redirecting these payments towards the bank system could have caused hundreds of post offices to fold.

As such, while the Government was preaching its support for the Irish post office network, it was simultaneously making rapid and serious moves to undermine a key source of revenue for the network. This is a practice which continued right up until late 2016, when the Government finally performed a U-turn on this policy, partly in response to Fianna FáiI’s consistent lobbying on the issue. Even now, the Government has yet to fully secure An Post’s future with the Department of Social Protection by refusing to offer An Post a long-term contract to deliver cash social welfare payments. This contract represents a considerable portion of An Post’s overall business; in 2015, it was worth approximately €54 million and allowed over 38 million social welfare payments to be made.

We know that An Post exceeds the requirements of its contract with the Department of Social Protection in terms of its geographic reach, and that the post office network is capable of delivering this service. Instead of recognising this and extending some minimum security to An Post, the Government has decided to renew its contract with An Post on a yearly basis. We are awaiting its decision for the coming year. This is no way to support our post office network. Why is the Government insisting on keeping such an important and efficient service in the lurch? These are the types of contradictions that are prevalent in the Government’s approach to the An Post network, such that we are left wondering how real is its commitment to the post office network.

As I have emphasised, in order to ensure the long-term viability of the An Post network we will need more than a continuation of existing services. To survive in the dynamic and ever-changing marketplace, An Post will need to be enabled to change, grow and adapt to new consumer demands. With this in mind, Fianna Fáil has brought forward a number of promising proposals which build upon An Post’s excellent reputation and strong base around the country.

There is no reason that the An Post network could not deliver more State services to the people of Ireland. Given that it has a strong presence in Irish villages, towns and cities, An Post’s network of post offices is uniquely poised to become hubs for all State payments and charges and for other types of services, such as local access to State services. This would be of huge benefit to our post offices and the communities they serve. Not only would it make it more convenient to make these payments, but it would increase footfall in post offices and create an additional source of revenue for the post office network.

We share this view with the Grant Thornton report, which underscored the benefits associated with this measure. Across the five potential integration options that the report analysed, such as allowing customers to make hospital payments and household charges through the post office network, a positive cost-benefit ratio was observed. In short, there are significant benefits to be accrued by adopting such an approach for more than just the post offices. This proposal could work very well with a further measure to allow post offices to become multi-purpose locations that offer a range of Government services. For example, the closure of rural Garda stations is of serious concern to rural residents, and we should be exploring avenues for multiple State services to share the same space. The current Government has dragged its heels on this proposal. Furthermore, the viability of the An Post network could be greatly enhanced by the expansion of financial services available in post offices. Currently, Allied Irish Banks, Ulster Bank and Danske Bank allow their customers to make lodgements, credit card payments and withdrawals at the post office network. This is greatly welcomed by our party, particularly because it comes at a time when many banks are closing their branches in rural Ireland due to the relatively high overheads.

Excluding large swathes of our population from banking services is simply not acceptable, and allowing An Post to expand its current financial services and to engage with all banks active in Ireland would go a long way toward counteracting this negative trend. Fianna Fáil has been very exercised in our requests for this and the previous Government to examine these proposals in detail and to consider their implementation.

Time and time again, the Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, Deputy Heather Humphreys, the Minister of State, Deputy Michael Ring, and their predecessors have spoken in the House to reassure us that this process is under way. We have been repeatedly told that these issues, and many more, are being considered by the post office network renewal implementation group. The Minister of State, Deputy Ring, informed the House last November that the group would be publishing its recommendations in December of last year. This has yet to transpire.

Similarly, a Minister has highlighted the establishment of a post office hub working group to examine the possibility of post offices becoming community hubs. We have yet to hear back from this working group. While we understand that the need to examine these issues carefully, there is no need for the substantial delays we have seen to date.

The news from the reports and various interest groups that we have spoken to is clear. There are solid options for the post office network to diversify its business model and to move to a more sustainable footing. Our post offices are ready to make the changes necessary to ensure their survival. Communities around the country are depending on us to make sure that it is allowed to do so and is supported in doing so, yet the Government is still dragging its heels and making it ever more difficult to take the type of action we need to save the post office network. It is nothing short of abhorrent.

To sum it up, while I heartily welcome this first sign of progress on the issue, I ask all Members of the House to avoid complacency. Further action is needed to preserve our post office network and ensure its survival, particularly in rural communities. Fianna Fáil will not stand by as one of the few remaining community centres in many areas is placed under unbearable financial stress. We will not ignore the concerns of postmasters and rural residents who feel completely abandoned by the policies and actions of the Government. Instead, we will be consistently searching for new and more comprehensive solutions to the issue of financial losses and we will co-operate with all interest groups to help post offices put these solutions into effect. I hope that we will be joined in addressing this issue by all who sit in the Chamber today.

The Minister will be aware that yesterday evening the Joint Oireachtas Committee on Communications, Climate Action and Environment had what I can only describe as a very open and frank discussion with all the stakeholders. I was impressed by the presentation of the chief executive of An Post, Mr. David McRedmond. He has a clear vision on how to turn around An Post as a company. That he has undertaken a period of consultation and the preparation of a report with the assistance of McKinsey and Company is a welcome development. That he has set a timeframe for the publication of the report by the end of the second quarter of this year is also welcome. He is putting in place the kind of timelines that, unfortunately, the Government has not put in place in respect of the issue. He indicated to the committee that the output from the exercise will be a series of decisions that will have to be taken by the board of the company. If anything emanates from it that requires policy change or legislation, that responsibility will lie with the Government. It is clear that he has a focused approached and that we are now on a path towards a series of decisions that need to be taken to put An Post on a firm financial footing.

Given McKinsey and Company's experience of working with other postal companies around the world, I hope that there will be a recognition of the opportunities as well as the constraints in the market. There is an awful lot of talk about the diminishing and dwindling postal service because of the way in which we now communicate, which is by electronic means. However, with the advent of electronic communication and the way in which retail activity has changed, an awful lot more of our citizens are purchasing goods, in particular, and services over the Internet. This has created an increased demand on the parcel side of the postal business. Unfortunately, An Post has been tardy in recognising the potential benefit and some of the commercial operators have stolen a march on it. My impression from Mr. McRedmond is that An Post sees the opportunity. Given its strong presence and significant infrastructure and architecture throughout the country, I would hope that it would be in a strong position to grab hold of that business and to make it a meaningful input into the viability and preservation of the company and ensuring the future viability of the post office network.

I have very real concerns but, given the financial position presented by the Minister, we feel we have no choice but to support the price increase to ensure the financial viability of the company in the period before the McKinsey report and the decisions that will flow from it to put the company on a firm footing can be put in place. It is to some extent with a heavy heart that we support a price recognition. We recognise that there is an impact on small to medium-sized enterprises when the price of the stamp is increased. It will be just a matter of switching to electronic communication for larger companies that have great enough volumes and they will probably save money in the long run. However, this will place a burden on those small to medium-sized companies that are caught in the middle. They do not have the capital to invest in electronic communication means and will have to pay the additional postal charges. This will place a burden on them and it more difficult for them to survive.

In taking this action and supporting the legislation, we recognise the positive impact it can have on An Post, the post office network and those who are employed in the provision of the service, but by no means is it a recognition that this is the way forward or the solution to An Post's problems. We need to see a reorientation and reconfiguration of the business that is based around the vision for the future and how the company will position itself having recognised the trends. It cannot be a head in the sand approach. It cannot be just a case of saying this is the solution, away we go and more of the same. We cannot do that because it would not be sustainable in the long term. That is our position. We support the removal of the cap and are happy to do so in light of the circumstances but recognise that the ultimate solution needs to flow from the McKinsey report, the efforts of Mr. McRedmond and his management team and the board of An Post. I would hazard a guess that the Fianna Fáil Party will not be found wanting in supporting the kind of change that is necessary to put the company on a viable footing. It is then over to the Government to drive that change when the report is published.

The post office and postal services are highly valued by the public and people trust the service. The universal service obligation, which delivers 94% of all domestic mail the next day, is unrivalled in Europe. It is a fantastic service. However, the fall in business in the postal services and in post offices generally has put the future of this service at great risk. To maintain the service, we must work to ensure that people have good reason to use the postal services, visit post offices and do business there. The problem with the Bill is not just the price increase. Sinn Féin sees that action has to be taken, but the defects in An Post were highlighted as far back as 2002 and 2003. That point was reinforced in our discussions at the committee yesterday. However, there is no point in going backwards. We know that action should have been taken through the noughties, but it was not, so we must take it now.

There is a problem with just repealing section 30 of the 2011 Act and removing the cap ComReg can currently impose. ComReg can set a range and I understand the current range is 60 cent to 75 cent. Removing this power is a negative move. We believe that there should be freedom to increase charges but ComReg needs to play a role. The Bill removes ComReg's role, which is counterproductive and will push more customers away. This is particularly the case given the price increase that has been mentioned. The Bill does not simply raise the price cap but gets rid of it completely. We need to be careful because it removes the checks and balances currently in place in this important public service.

Significantly increasing the price of postage before the development of an enhanced An Post service will jeopardise the viability of the company further. By lifting the cap on postal pricing, we are told that it is expected that the increase in the cost will be in the range of 12% to 38%. It is a certainty that an increase at the higher end of the scale will dissuade people from using the postal service. The Bill may temporarily help to tackle the financial challenges faced by An Post but people will vote with their feet in the medium to longer term. The General Secretary of the Irish Postmasters' Union has expressed concerns that the price increase will reduce the volume of business and threaten the postal service. Age Action, whose representatives also attended yesterday's committee meeting, also raised serious concerns about the intention to repeal the price cap and remove the ability of the Commission for Communications Regulation, ComReg, to impose a price cap, citing the effects of previous price increases. The organisation argues that the increase will affect older people disproportionately as they are more likely to use postal services. It noted that only 3% of those aged over 75 years used electronic mail. The repeal of the pricing cap also represents a weakening of the power of the regulator. ComReg's role will become one of a spectator or commentator at best.

The postal service industry in Ireland had a turnover in 2015 of approximately €540 million. An Post's losses in the same year amounted to €25 million, the bulk of which, as we learned yesterday, can be attributed to international mail delivery and the registered mail service. An Post receives only 44 cents per standard letter item for international mail. Domestically, however, postal services are almost breaking even.

The consulting group, McKinsey, has been hired to conduct a strategic review and advise An Post on the future of the business. It is surely premature, therefore, to implement price hikes. While Sinn Féin accepts it is necessary to take action, it is wrong to remove the role of the regulator and its ability to impose a cap on prices before the McKinsey report has been published. I understand the report is due in April or early May.

Although An Post and the broader postal service network in Ireland are separate entities, they cannot be viewed in isolation from one another. The post office network must be considered in any examination of postal services. The financial health of the postal network and the well-being of the corporate structure of An Post are related. Sinn Féin supports the expansion of the services provided by the post office network. Giving post offices the ability to sell insurance, process motor tax, offer single payment accounts, provide banking services and process the payment of bills to local authorities are positive moves which Sinn Féin supports. We support most of the recommendations of the Kerr report and want them to be implemented speedily. As I stated, these issues have been discussed for years. The initial Kerr report was produced 12 months ago and a supplementary report has been produced in the meantime. It is time to act on them.

It is crucial that the Government does not encourage business away from post offices by directing people to have welfare payments paid directly into bank accounts. There is broad agreement among An Post and other stakeholders on the key recommendations of the Kerr report. The success of the recent pilot scheme between post offices and credit unions demonstrates the scope for bringing additional financial services to the post office network. There is no reason for not rolling out this scheme across the entire network of 1,130 post offices.

The local post office is an essential component of the cluster of businesses needed in any small town or village. The post office network must be protected and the services provided must be enhanced. The removal of the local post office has detrimental knock-on effects on other small business in a small town or village. The Government must take action in this regard and ensure the position of the local post office is cemented before resorting to permitting price hikes.

Sinn Féin is committed to creating a vibrant post office network across the country. We want to protect the universal service obligation, ensure adequate funding for it and avoid potential threats to pay and conditions of staff who recently received a 2% increase. We want to ensure competition in the postal sector does not reduce quality of or access to service, retain An Post in public ownership and protect rural communities from further decline. While a price increase may be necessary, pushing through this Bill prior to the McKinsey report being completed and the Kerr report recommendations implemented is ill-considered and puts the cart before the horse.

The purpose of the Bill is not to permit price increases but to sideline the Commission for Communications Regulation. We complain a great deal about the inactivity of regulators. This legislation sidelines and removes a regulator from the pitch, which will result in ComReg becoming a spectator or, at best, a commentator. This is the wrong approach and Sinn Féin will seek to amend the Bill.

I welcome the opportunity to speak to this Bill. As stated by my colleague, Deputy Stanley, Sinn Féin will not support its passage. While I recognise that measures are needed to address the falling volume of postal business and I am cognisant of the fact that the increase in the price of postage stamps was one of many recommendations of the recent Bobby Kerr report on the development of the post office network business, my party does not support this particular recommendation and is concerned that other positive recommendations in the report have not been reflected in the Bill.

This individual measure of raising postage costs for consumers, while failing to develop a broader range of services at post offices, will be counter-productive and push more customers away. The Bill does not simply raise the price cap but abolishes it in its entirety. In the context of liberalisation directives from the European Union on postal services, this measure will allow less well regulated delivery companies to move into the market which could further lower wages and take more of An Post's business. Furthermore, a significant increase in prices now, before the full benefit of developing an expanded An Post service, could jeopardise the viability of many post offices around the country. In my capacity as my party's spokesperson for older people, I am particularly concerned about the implications this would have on senior citizens as they are more likely than others to use mail services rather than electronic forms of communication and they have already been badly affected by post office closures the length and breadth of the country.

It appears too that the position could get even worse. In November, it was reported that 500 post offices could potentially face closure. Aside from the large number of people who could be left unemployed, this would be absolutely disastrous for rural communities and would galvanise the widespread belief that this Government has little interest in rural Ireland. The post office network and rural communities can only be safeguarded if there is the political will. To prevent a swath of closures, the Government must enable the post office network to expand its range of services to ensure its future viability. The Irish Postmasters Union, for example, has outlined its vision of a post office network that can provide State services and increased financial services, among other functions. These include Department of Social Protection services, driver licences and motor tax payments.

The Kerr report was published a year ago. It presented a number of recommendations to allow post offices to thrive by enabling their diversification into financial services, social enterprise and public service delivery. These are positive recommendations which we wholeheartedly support. I urge the Government to act on the implementation of the report as soon as possible. However, the recommendation contained in the Bill of an increase in the price of postage stamps is one that we cannot support for the reasons stated.

As my colleagues stated, Sinn Féin will not support the Bill. An increase in the price of postage stamps was one of many recommendations made in the recent report by Bobby Kerr on the development of the post office network business. However, the Kerr report makes a number of other positive recommendations which the Bill does not reflect or address. Sinn Féin will argue against the Bill because raising postage costs on consumers without first developing a broader range of services at post offices will be counter-productive and will not serve any purpose. Significantly increasing prices before the development of an expanded An Post service could have serious consequences for many post offices, particularly in rural communities.

It is clear, even from the Bill, that the Government does not want to know about rural Ireland because rural Deputies find themselves again fighting for the survival of rural Ireland.

The post office is an essential service. It is a basic but vital service. The Bill may temporarily help to tackle the financial challenges of An Post, but it is not a long-term solution. We need a long-term solution to protect the post office network and ensure the reopening of post offices in rural towns that were unfairly closed, thereby depriving people of vital services. An example of this is the closure of the post office in Killeigh, County Offaly following the retirement of the postmaster. I am calling for the reopening of that post office because there is a demand for it. As in the case of many other villages and towns, there is a demand for this basic and vital service in Killeigh, which is a rural village with a growing population. I have raised this issue on numerous occasions with the Minister of State, Deputy Michael Ring, and representatives of An Post. I am calling again for real consideration to be given to this proposal, which will help to revitalise a rural town which, like many other towns, has a great deal of potential but has been abandoned by the Government and is being kept alive by community spirit.

I recognise that there are challenges facing An Post. We have all acknowledged this. We need to modernise and transform the role of the post office so that its becomes a hub for accessing public services within the community. An Post can be part of a joined up approach to financial services provision to support SMEs and the development of local economies. Post offices should be afforded the opportunity to sell insurance, process motor tax and link up with credit unions. There is need for a serious change in the Government's approach to the post office network and to rural Ireland. Rural Ireland exists. There is life beyond Newlands Cross. We need a pragmatic, long-term solution to protect and encourage the development of post offices in rural Ireland.

The Minister of State, Deputy Kyne, can take Sinn Féin's opposition to the Bill, in the first instance, as a vote of confidence in post offices and, in the second instance, as a vote of no confidence in the policies of the Government in terms of its failure, and that of previous Fianna Fáil Governments, in regard to post offices generally and, in particular, rural post offices and rural Ireland. Once again, rural issues come a distant second when it comes to policy and practice in this state.

The Bill is principally about a cap on postage charges. The Minister of State spoke about how, from his perspective, increasing the price of a stamp will help post offices. As pointed out by the Sinn Féin spokesperson in this area, Deputy Stanley, the Bill not only proposes to increase the postage charge, it seeks to remove the current cap and the checks and balances in place in this area. As such this is not a quick fix solution but a proposal that will have long-term consequences because of a lack of regulation following the removal of those checks and balances.

The problem is that the Bill is presented as a panacea for the problems facing the post office network. In reality, a full suite of measures are necessary to help and boost rural post offices, many of which were outlined by my colleagues and have been well rehearsed in all of the reports published on the future of post offices. The Government has turned its face against such measures. We are all aware of the difficulties which arose in the past when people in receipt of social welfare payments were directed to banks and other financial institutions and away from post offices. The policy of the Government is anti-rural post offices and anti-rural Ireland, which is not in the interests of rural communities.

As I said, Sinn Féin's opposition to the Bill is a vote of confidence in post offices and a vote against the policies of the Government.

As stated, Sinn Féin does not support the Bill because, at the end of the day, rural Ireland matters. If rural Ireland matters, we must ensure the post office network is retained and grown. There have been many post offices closed throughout the country. The post office in the village of Cloone, which is in my constituency, closed a number of years ago following the death of the postmaster. Similarly, post offices the length and breadth of the country are being closed. The Government is doing its best to close post offices. That is the experience of communities. The Government may state is not its policy, but that is the reality on the ground for the vast majority of people. The post office in Ballygawley in Sligo is under threat of closure, in respect of which consultation with the local community is ongoing.

Legislation which seeks to remove the cap on postage charges does not change policy. The policy of the Government is continuously to move the more profitable parts of the postal service to the private sector. The country is awash with couriers delivering parcels yet our post office service, a network that has been in place for over a century, cannot access that type of work. This is happening because Government continues to pursue its policy of moving profitable services to the private sector while the remaining services are left to the public sector. When the post office network then loses money we all throw our hands up in the air declaring that it is no good and the public purse cannot afford it.

The Government needs to realise the people must have a service and that that service can be profitable if a genuine effort is made to make it profitable. I am of the view, as is the post office network and the trade unions involved in this area, that a solution can be found to make the postal service work. The solution put forward by the Government is not adequate and will not provide for rural post offices the length and breadth of this country. We do not want to go down the road of privatisation of this service and the closure of post offices by a thousand cuts. This proposal will result in rural Ireland being left behind again. I appeal to the Minister of State to ensure that does not happen.

The Labour Party's support for this legislation is conditional on the Kerr report recommendations being taken seriously and the role of ComReg not being excised into the future to that of a regulatory body overseeing its obligations under section 12 of the 2002 Act. I take some comfort from the Minister of State's contribution in regard to the recommendations inherent in the Kerr report.

If one has regard to ComReg's postal strategy statement 2015-2017, there is a statutory remit to ensure the provision of an affordable universal postal service that meets the needs of all postal service users. There is legitimate doubt as to whether this legislation, as proposed, will compromise affordability for consumers. It is clear to anybody that the proposals in this legislation in terms of the increase in postage charges will compromise the affordability element inherent within ComReg's remit. ComReg has limited statutory powers to regulate An Post postal services that are not universal postal services. We know from ComReg that letter volumes have fallen by 32% since 2007 and that An Post is forecasting a further decline of approximately 4% per annum in this regard. As the universal postal service provider, An Post is the market leader in the delivery of letters and it must take the necessary steps to address this decline and ensure the continuation of the universal postal service.

I welcome the review commenced by the company. We are all agreed that strategic changes and restructuring must be real and that there must be definitive timelines on those actions. If An Post has full commercial freedom to ensure that its other postal services are viable financially then there is a question mark over whether it has achieved this historically.

The answer is that clearly it has not done so. If it had, we would not be here now. That places a significant burden on the Members of this House who are genuinely trying to ensure a future for An Post but who are also trying to protect consumers against undue and unfair price increases. There is something of a Hobson's choice. The 2011 Act is clear in respect of An Post's obligations to the universal postal service and compliance with price affordability, as I have said. An Post must comply with the price cap. It is very tempting to ensure such a regime is not undermined or changed so as to protect consumers and speak to the public interest.

Price increases lead to flows towards electronic means of communication. This is well documented. The price elasticity affecting the cost of postage is negative, as we know. Where one keeps increasing the price, one reduces the demand, and the consequent revenue loss puts An Post in an even more precarious position. The price cap mechanism employed by ComReg is arguably a protection in more ways than one. It regulates price and, in doing so, ensures volume is theoretically maintained to keep An Post viable.

The technical challenges faced by An Post in this electronic age are well documented. The availability of electronic substitutes has resulted in diminished mail volumes, thereby affecting revenue streams. Corporate behaviour is changing and entities such as Bank of Ireland are increasingly moving their communications with clients to an online format. Social welfare contracts constitute another case in point. Public finance pressures are also influencing behaviour in respect of funding deficits in the postal sector right across the European Union.

The recent Kerr report and post office network business development group recognised the worth of the post office network. The report made 23 recommendations. One must ask again why they have yet to be implemented in view of the fact that the group was established on foot of the recommendations of a Cabinet committee on social policy. The Kerr report recommendations also form part of the 2016 programme for Government.

The chairman of An Post addressed the Dáil committee last July. He spoke about the very precarious financial position of An Post. He reiterated that in the past 24 hours in regard to the universal service obligation. Let me refer to the 2015 annual report of An Post. The opinion was articulated through our own research entity in the Houses of the Oireachtas. The report states mail accounts for 63.7% of revenue and that the extent of the decline is articulated through losses of over €340 million. It is stated that, of the 580 million items handled by An Post in 2015, 60% related to USO products while letters accounted for 90% of domestic USO volumes and 74% of international outbound USO volumes. Therefore, bearing in mind the ComReg report, to which I have referred, we know that the deteriorating liquidity of An Post is a matter of grave concern. The amount of cash in hand and in the bank fell from €350 million to €50 million between 2008 and 2015, as I understand it. I am sure the figure has diminished even further. ComReg tells us that 80% of postal transactions are business-related and that 30 large postal service users, including banks, utilities and Government, account for the vast majority of mail sent.

I referred to Bank of Ireland as an example of just how much mail has reduced in such a short period. If volume has reduced and if the current cap is changed or goes, there will be a serious danger of rising costs for customers and SMEs, in particular. In this scenario, price increases will result in a further decline in revenue, precipitating the demise of An Post over a long period. If we do not arrest this decline now, we will do a disservice to present and future postal service users because the service will not exist in large swathes of the country.

Throughout the European Union, there are examples of where the universal service obligation has diminished to an unsustainable level. Monday to Friday deliveries have ceased in some instances. Post offices do not exist anymore in Sweden. Supermarkets and newsagents act as postal service agents. They behave like post offices and act as collection points. Letters are delivered but packages and parcels have to be collected.

It does not take a genius to figure out that if An Post's cash reserves are in such a perilous state, something will have to give. It is not beyond the bounds of possibility to envisage a time when the Monday-to-Friday delivery as we know it may become a thing of the past. There is a provision in EU legislation that could be helpful to An Post. It refers to services of general economic interest - I am stating this specifically because I hope the Minister and his officials will take on board this concept, which is real - or economic activities that allow public authorities, namely, the Irish Government, to identify as being of particular interest or importance to citizens and that would not be supplied if there were no public intervention. Examples are transport networks, postal services and social services. In practice, this could mean that the Government could specify that a particular service be provided through the post office in a manner that is required by citizens and argue that no private supplier could do the same. In other words, the Government could utilise the EU provisions in regard to services of general economic interest to channel certain Government services through the post office, thus increasing footfall and revenue to the post office. Opportunities to do this in the past have not been taken, to the detriment of the post office network. The Government, if it is genuine in its commitment to the future of the post office network, must utilise all such future opportunities to use the services of general economic interest. If one marries this element to the Kerr report recommendations, one notes that there is complementarity. If it is the case that the mechanism of services of general economic interest cannot be utilised or mobilised in this instance, perhaps the Minister could make it clear in his response, or at some other stage. We firmly believe, however, it is a mechanism that can be used. It has been used by other countries, specifically with regard to postal services to ensure their protection.

There is a stark choice for this House to make. We note the concerns of postmasters and Age Action. The cash reserves of An Post are so precarious at this point that this action is necessary. It is the lesser of two evils. I do not believe we can wait for a review of An Post's own financial position to take place and for a report to be issued thereon with a set of recommendations. We are up against the clock on this one. I fear that if we do not support this legislation, the cash reserves are such that wages will not be paid and post offices will have to be closed. I do not want to exaggerate or sound alarmist based on the briefings I have received on this issue. It would be very easy for me to state that we have to protect consumers and ensure that there are no further increases in the cost of postage stamps.

However, most Deputies are of the view that, if it is a choice between that and protecting workers, the network and the universal service obligation, USO, as well as ensuring the hundreds of post offices around the country stay open, and notwithstanding the attitudinal issues in respect of rural areas, it is important that we continue to maintain the infrastructure and not risk the demise of the service as we know it. If that means supporting this legislation, then we will support it.

We also support the Bill on the basis that the Minister will be proactive in terms of the recommendations of the Kerr report, will explore genuinely further cost reductions and will make a genuine attempt to engage on the matters of services of general economic interest. We should ensure cash reserves are bolstered in order that everyone can continue to enjoy, if I may use that word, or use the service and there is no risk of an immediate closure of certain of its elements.

I take the opportunity to wish the Minister, Deputy Naughten, well in his recovery. We wish him a speedy return to the workplace.

I call Deputies Barry and Bríd Smith who are sharing time.

Let us take a glimpse into the near future and examine the case of a modern Romeo and Juliet, and Denis Naughten. Romeo and Juliet are engaged in a passionate correspondence. All of their friends have smartphones, tablets and laptops, but this romantic couple feels exchanging words of love via technology is a bit of a passion killer; therefore, they decide to conduct their correspondence via post. One day in 2017, Juliet calls down to her local post office - she visits often because they send loads of letters - to mail her latest letter. Alas, the postmaster regretfully informs her that Denis Naughten has decided to increase the price of a stamp from 72 cent to €1.06. Distraught, Juliet runs home in tears and sends a plaintive message to Romeo by e-mail. It was never platonic, but now it is electronic.

Joe Higgins lives on.

Romeo and Juliet may not be the typical stamp buyers. An Post's customer base may comprise more small business people and older people than lovelorn teenagers, but is the Minister of State not concerned that the basic effect of a large stamp price increase might be the same for them? The Government will not hike stamp prices by large amounts without losing customers. The volume of mail is down 38% since 2007. Does the Minister of State not believe that a price increase would drive that down even further?

There are alternative strategies for increasing An Post's revenue stream. In New Zealand and Germany, state-run post office banks seem to be highly successful. It is high time that we had such a bank. A Bill proposing this initiative passed Second Stage before Christmas. The Minister of State might update the House on the Minister's attitude to this initiative and the timescale for same.

The Irish people spend €6.6 million everyday on clothing and household goods ordered online and delivered by parcel post, yet an Irish Government shut down An Post's SDS delivery service when it should have been beefed up. What plans does the Minister have to revive such an initiative?

Thankfully, the Government has backed off from its plans to divert business away from An Post and towards the banks by paying 625,000 social welfare recipients via electronic transfer into their bank accounts. Why was such a proposal ever made in the first place and will the Minister of State assure the House that no such proposals will be repeated?

There is the potential to make post offices into hubs where a range of State services can be accessed, but talk is cheap. This idea needs to be translated into reality. What concrete plans does the Minister have to do so?

The Anti-Austerity Alliance has no faith in the Government to act seriously on any of these proposals. After all, since 1984, Fianna Fáil and Fine Gael-led Governments have presided over the shutdown of 1,000 post office branches. Why should those who have butchered the service be trusted to develop it in future? A genuine left government would implement all of these progressive measures. While we campaign for such an outcome, we will continue opposing all measures that undermine rather than save the post office network, including this one.

I attended yesterday's committee meeting and noted the absence of the Minister, Deputy Naughten. As I was not aware that he was out of action, I would like to wish him well in his recovery.

Although I was not present for the whole committee meeting, my impression was of a love-in between a plethora of representatives of the many committees that were investigating how we could make An Post viable. Each committee has been studying one aspect or another of the problem, yet none seems to have reported back with any meaningful solution other than to increase the price of a stamp. One might say that it is only 30 cent, which is not all that much, and it would give the company a cashflow and enough breathing space to survive, as argued by the Labour Party Deputy before me. That sounds reasonable, but when one considers how the volume of mail has declined - Deputies have referenced the percentages - and the cohort of people who pay for stamps, one realises that this would place the 30% increase on the shoulders of those who can least afford it. I refer, in particular, to pensioners, older people and small organisations, for example, communities and organisations that regularly communicate by letter with their audiences. As Deputy Barry stated, an increase of 30% would probably see them turning to e-mail, being put out of action or having their budgets hurt badly. Needless to say, the Government will not give them an increase in their community grants, which have been slashed consistently during the years of austerity.

We will not deal with the serious problem facing us simply by increasing the price of a stamp as an emergency measure. Instead, this will have the opposite effect, in that more people, and smaller organisations in particular, will move away from using postal services.

As the House knows, An Post's key loss maker is the USO. An Post had an operating profit of €5.2 million last year because of the increase in the volume of parcel post, but it has been forced to compete in that regard with the likes of DHL and FedEx, which do not have the compunction of the USO, and the Government cannot subsidise the USO under EU law.

With more than 1,100 outlets across the country, 74% of An Post's business is connected with social welfare, savings accounts etc. Attempts are being made to get more such business. That would be of considerable help, but it should also be acknowledged that An Post's workers have helped to reduce the company's running costs through various means down the years, for example, through wage reductions, productivity measures etc. Unless I am mistaken, the contribution of An Post's 10,000 staff has led to savings of approximately €100 million.

There have been all sorts of attempts to make An Post better, but this latest attempt should be rejected. It is the wrong way to try to mend the service. It is like being given a plaster after splitting one's head. It will do nothing to service the rural and isolated communities whose post offices are facing closure. As a member of the committee, I have seen no real attempt being made by any of the study groups that have been established to consider the impact of the removal of post offices on the fabric of society in rural and isolated communities. Post offices play a vital role. Although it might be said that they only service small communities, those communities are just as important as this community in the Dáil or any other.

In my area Rialto post office was recently closed. There is a post office in Dolphin's Barn and Kilmainham which are handy enough for me to get to on my bicycle, but there are many aged people, people with disabilities and others who are new to the community who depend on the local post office for the service, convenience and the vital social role it plays in their life. It seems that where we have problems in the delivery of public services the Government tries to put a plaster on a situation instead of being determined to protect and to ring-fence public services. Vital semi-State companies that play a very important social role are being considered as commodities in a competitive world that the Government seeks to cut and reduce. In a similar vein we had an announcement yesterday that it is intended to let hundreds of Bus Éireann workers go. We must think strongly about the cost to the elderly and the most vulnerable of what the proposed increase would mean. We should not consider it as just a small increase that would give us cashflow, it is a serious setback for the overall solution to An Post’s problems if we think we will address it by increasing the price of a stamp.

A plethora of working groups are looking at the issue. The Kerr report examined it in depth. Following that, a post office hub was set up which is overseen by the Minister of State, Deputy Ring. A steering committee was set up by Mr. Dermot Divilly to consider the Kerr report and when he gets back to work the Minister, Deputy Naughten, and his officials will examine the potential for incorporating motor tax and other Government services into An Post services. That is all great, but we have not had an outcome resulting from the reports. It strikes me that if there is a crisis then the speed and interest with which it is dealt with by so many groups, committees and Ministers should be coming to fruition.

In my experience, the problem with having so many different groups looking at various aspects of a service is that when the closure of a post office such as the one in Rialto occurs one does not know who to speak to. One speaks to the Minister, Deputy Naughten, who says he will look after that and get back to one. Days and weeks go by and when one e-mails the Minister he says he passed it on to the Minister of State, Deputy Ring. When one contacts the Minister of State, Deputy Ring, he acknowledges one's concern and then there is a further acknowledgement and a statement that he is looking into the matter. Weeks later one finally gets a communication saying one will have to talk to management in An Post about this. It is a case of "I know nothing; I am from Barcelona". That is what happens when one creates a network of responsibility involving this, that and the other committee and at the end of the day the crisis is not addressed and the service suffers.

There are solutions. One was mentioned in the previous discussion on the issue and it related to addressing the effect of the closure of banks in rural communities. We should have received a report back on it by now because it is not rocket science. We are not reinventing the wheel. The banks have shut up and gone off and one solution was to replace the services that were provided by high street banks with something similar to the Sparkasse model in Germany or the Kiwibank in New Zealand. I used the Sparkasse model when I was in Germany. One got all the banking services from a post office-type banking service that brought a dividend back to the government. Instead of having a cruel and inhumane banking sector that does not give a damn about its customers, one could create a community banking service that would make An Post viable and keep post offices in every rural village and small community like Rialto. Those are the solutions we must examine and we cannot take forever to do so. We will oppose the increase because it will be the first of many. If the Government thinks that is how one deals with a problem then it will try to do it again. Everybody should be aware of that and should oppose the Bill.

I understand Deputies Thomas Pringle and Joan Collins are sharing time. Is that agreed? Agreed.

The Bill deals with the universal service obligation and the need for An Post to have a price increase in the cost of postage to try to shore up its financial position in the current climate. As has been outlined, we had the cheapest postal prices in the European Union; therefore, the increase would probably only bring the price into line with EU levels. However, the crisis in An Post has also been created by the European Union. As other speakers have outlined, the post office network and An Post itself have a social responsibility and play an important social role in terms of everyday life across the country. The problem is that none of the EU regulations under which An Post operates recognise that, other than the universal service obligation and that is the crux of the problem we face in An Post. Until we as a people and a Government accept that An Post has a social role and we step up to that social responsibility, An Post will always be in crisis and it will be a case of diminishing returns until such time as the Government throws its hands up and says it can do no more and An Post will cease to exist. That would be a disaster for the 10,000 people whose work depends on An Post. It would also be a disaster for the millions of people across the country who depend on the postal service for the delivery of their post but also for the social contact involved in the postman calling to the house to deliver the post.

The banks and large utility companies have pushed customers to e-billing and e-statements, which has taken away a segment of the previous business of An Post. It is a cheap way for the banks and utility companies to deliver their bills. It was outlined by previous speakers that the price increase could speed up the process of encouraging others who currently use the postal service to change to e-billing, e-statements and e-communications rather than continuing to use the postal network. I am also concerned that the price increase could have the unintended effect, or perhaps it is a desired effect, of enticing private operators into the postal delivery service in more densely populated areas.

I am reminded of the situation with electricity. We had the cheapest electricity in the European Union in 2002. The ESB, a semi-State company, was providing electricity at a very cheap cost for consumers across the country and it also made a profit, but when the EU decided the electricity market had to be deregulated, liberalised and opened up to competition, we discovered that electricity was too cheap to provide competition as the price would not attract any private operators into the market. The energy regulator embarked on a programme of forcing the ESB to increase its prices over a number of years in order to entice private operators into the electricity market. I am concerned that a price increase in An Post would have the same effect of making the market more attractive for private operators to carve up some of the business for themselves. In deciding whether to enter the market and compete with An Post, they will look at what An Post is charging and seeing whether they could come in at a lower price, which ComReg will facilitate them to do. An outcome of the price increase could have a detrimental effect on An Post.

In his statement the Minister of State said a 1% reduction in mail volumes cost An Post €4 million a year, which is probably true, but I take issue with his statement that a 1% increase in pay costs An Post €4.5 million a year. The recent pay deal that was worked out with An Post staff has been introduced on a cost-neutral basis as staff gave up their entitlements to sick pay and other benefits to off-set the costs for the company. I do not believe a 1% increase in wages would have the same knock-on effect on An Post.

I have spoken about the social role An Post plays, which has not been recognised. It is a year since the Kerr report was published but there has been practically no implementation of the recommendations of the report, which would help to make An Post a sustainable company right across the country and would help to keep rural post offices open. We hear that the recommendations of the Kerr report will become part of the strategic review of An Post's business and we will have to wait for it to be completed before there is any implementation of the recommendations.

If that is included in the strategic review, we will have to see the roll out of it; therefore, that is a further delay. What we see here and what we have seen constantly is ongoing delay in actually dealing with the issues. The Kerr report could have been implemented last year and we could start to see the effects of the roll out of that at this stage. It could be helping to boost An Post, make the network more sustainable and assist the company in remaining sustainable, but we have lost that with the delay and the strategic review will be further delayed. We will be in a constant spiral, which will be almost like a death spiral for An Post, where there will be pressure to increase prices to fund it in the future. That increase in prices will reduce revenue. We are not getting any delivery of the recommendations that could help sustain the network and company and it will come to a point where the whole thing could collapse and come down like a house of cards. That is wrong. We should be taking a decision to recognise the social responsibility An Post has and the social role it plays and ensure that the price of stamps can be kept as low as is feasible to ensure that people can have a service they can continue to afford to use and the people who use that service are not subsidising the banks and utilities that are moving away from that service and are not paying an additional cost through that. The company has serious problems and we need to get a grip on them and accept the Government's and people's role in ensuring this service stays open because it is worth more than just the price of a stamp and the increase in stamp prices.

It is welcome that I can speak in this debate because I must declare an interest. I was a post office clerk for 33 years and I am on secondment in respect of my job here.

Following on from the point made by Deputy Pringle, An Post is a necessary service like electricity or gas. They are things people need. The history of An Post and other services involves deregulation led by the European Union - first of all with regard to packages and now in respect of the letter service. This has been coupled with the huge rise in technology. Most people would say that their sons or daughters probably would not even know what a letter is because they are all using email or texts. This is coupled with the fact that the banks and utilities are encouraging people to use electronic billing and e-mail to pay their bills and enticing them to do so with special offers and reductions. We mentioned this before in respect of the Department of Social Protection under a Labour Party Minister allowing the encouragement of the payment of social welfare payments through the banks. Elderly people are subsidising those deals because they do not use e-mail or computers as much as younger and middle-aged people.

I will give a brief summary of the background to this situation. I am a member of the Communications Workers' Union and have been contact with my union about this. It is a dilemma. We are talking about increasing the price of a stamp by about 30%. Does that then have the spiralling effect of fewer people using the postal service such that we are back in the same situation very quickly? Unless we see the Government linking something like this as a short-term measure to implementing the Kerr report within about two or three months to try to revitalise those services, this will not work in the longer term and we will be back where we started. It will impact on community groups and older people. On the other hand, if this decision is not made, we could see An Post not being able to pay its workers in the next few months, which would be a disaster. We should look at this in the context of the impact of deregulation on our services. Everyone thought that the PSO would protect the idea of a social service to communities but we see now that it does not. We see the pressures on Bus Éireann in respect of how it will deliver on those PSO obligations when it is not possible to put money into the companies.

Funding of the universal service obligation, USO, and An Post's financial strategy have been and remain a major concern for my union, not least because both are inextricably linked and have a consequential major impact on pay and conditions of employment for workers in An Post. Prior to the introduction of the Communications Regulation (Postal Services) Act 2011, the small monopoly An Post had in the reserve area was used to fund the USO. The union outlined at the time that unless steps were taken to fund the USO properly, it would be unsustainable in the medium to long term. Equally, the failure by successive Governments and the reckless failure of ComReg to require legitimate price increases have starved the company of much needed finance. This has resulted in the company spending its significant cash reserves to fund the day-to-day operations of the main business, which necessitated the recent sale of Cardiff Lane to subsidise the USO. In respect of price cap control, in April 2014 ComReg announced a revised pricing mechanism enabling An Post to apply for price increases over a five-year period based on the consumer price index. The CWU argued that the pricing structure was inadequate to fund the USO properly, most particularly in circumstances where mail volumes continue to decline leading to per unit costs rising. In its decision document, ComReg stated that the new pricing model would provide adequate funding for the USO assuming a further efficiency improvement of 10% by An Post over the five years, which included no provision for pay increases to An Post staff. The regulator's office operated in cloud cuckoo land by ignoring the reality that there is an obligation on An Post management to make adequate provision to make fair pay for staff. The adopted approach resulted in low paid postal workers subsidising the mail business while ComReg continues to award itself pay increases, including bonuses, the payment of which is largely financed by An Post and other communications operators. This is the madness of the world we are living in. Workers in companies are subsidising ComReg, NTA and all these groups.

I will address the issue of the pay increase because I am concerned about the point made about every 1% increase leading to a €4.5 million increase in costs for An Post. Workers have been looking for that pay increase since 2008. It has gone to the Labour Court every year. This year, the union went to the Labour Court regarding the 6% pay claim. In issuing its recommendations, the court stated "an effective pay freeze has applied in the company since 2008. In these circumstances it is understandable that the trade union group are now seeking a pay increase." The court stated the financial projections made by the company in relation to its core business do not suggest any amelioration of the current position in the short term and that there was a need for engagement between the company, its shareholders and the regulator, where appropriate, on the contribution of pricing and growth to the future financial stability of the core business. It said that the continuance of the pay freeze proposed by An Post was no longer a viable proposition. That was a Labour Court recommendation. The recommendation was to pay the 2.5% increase on 1 July 2016 and a 3.5% increase in 1 July 2017. A total of 50% of that will be made up of savings by the workers. I can tell the Minister that there are many angry workers in An Post who realise that they are going to get a 6% pay increase but will have to pay for it by giving a 50% saving. Again, it is a stark reminder of the proposition that is being put to Bus Éireann workers who are told they must take a 25% cut in their general pay for an increase of 2% offered by the company.

It does not add up from the workers' point of view.

The union welcomes the price cap decision and acknowledges that this significant and positive development has materialised relatively early in the tenure of the new CEO. However, in tandem with this change comes the increase in the price of the stamp. An Post must also review its overall pricing strategy which, in the union's view, is not coherent. It has displayed little or no joined-up thinking in the area over which it already has direct control in respect of the various products and service offerings which have also resulted in revenue loss.

The union fully supports the Minister's actions for the following reasons. An Post's quality of service is one of the best in Europe. Postal workers should not be expected to subsidise the national postal service. An Post has never received any State subvention. The Labour Court has stated there is a requirement on the company shareholder and regulator to engage in the pricing issue to ensure financial viability. Notwithstanding major ongoing cost reductions coupled with an eight-year pay freeze, the company is in a very precarious financial position. Crucially, 40% of the company's losses come from inbound international mail amounting to €15 million. Half of these losses arise from an international mail agreement entered into by the State and imposed on An Post.

We are seeing huge changes because of historical events and progress. If we want to provide services in this country, we have to be prepared to stand up to the European Union and say that at some point we cannot deliver the services we are obliged to deliver under the PSO and the universal service obligation to our community. It is a social service which also has to be productive.

I support my union's position. We have raised the issue of the rural post offices and the post office network in general in the Dáil since I became a Member and I am sure it was raised by Fine Gael in opposition before 2011. It has to be linked with a quick implementation of what can be a viable injection into the post office. I make a point also made by a previous speaker. Rialto post office was closed down overnight and it is happening everywhere with 1,000 post offices closed down under Fine Gael and Fianna Fáil-led governments.

Unless there is a change in Government thinking and unless the Government wants to keep the service viable, it will not happen. I do not expect much from the Government. I urge the people to put pressure on the Government to deliver from that point of view. It has to be the case.

I understand the members of the Rural Independent Group, Deputies Michael Healy-Rae, Danny Healy-Rae, Eugene Murphy, who is an exception, and Mattie McGrath, are sharing time.

I send my warmest best wishes to the Minister, Deputy Naughten, who is not here tonight and who would want to be here if he could. We are all grateful that he is recovering and hopefully making a good recovery after a serious accident.

The Government gave a commitment to post offices and community banking on page 48 of the programme for Government. The Minister explained to me that he was faced with a serious predicament, which was either to go along the lines of what he is doing now or else possibly be faced with having to go to the European Union to seek a derogation and bring us from a five-day postal delivery service to a three or four-day service. Having said that, I appreciate where he is coming from in what he is proposing to do.

I have to declare, as I have done several times previously, that I am a postmaster of a small post office in village where we are just hanging on to keep our door open. I have asked myself how increasing the price of a postage stamp will affect post offices like mine. I believe it will be prohibitive and will stop people from using the postal service at a time when we are inundated with other methods of communications such as the mobile phone and e-mails. We are really up against it in a battle for survival.

I have a number of questions. What is the post office development group's financial strategy for the next five years and is it operating a sustainable model? Has the post office development group within its report implemented any changes taking into account the promises made within the programme for Government? Does the post office development group foresee any post office closures, as predicted by the Grant Thornton report of 2014? How many contract post offices have had their income reduced since 2014 and in particular this year? Can this be broken down by the years 2014, 2015 and 2016? I know at first hand that in every post office that has come up for review, the postmasters have seen their incomes being dramatically reduced to the extent that it is making it unviable for them to continue. After rents, rates and insurance costs are taken into account, are some rural and urban post offices now operating at or below the national minimum wage? These post offices will not be closed by An Post but will just cease to operate because of lack of funding.

When the new social welfare contract is up for renewal, has the post office development group ensured within its current report there is both a social and economic element to the contract, which might help to regenerate and sustain all communities, both urban and rural? Does the post office development group have a plan to introduce community banking, as promised in the programme for Government following the New Zealand model in its final report? From a population of 4 million, Kiwibank now has income of over €100 million and 860,000 customers, as I have pointed out in this House previously. That is almost one in four of the population.

Are we to continue supporting the commercial banking sector that has vanished from rural and disadvantaged urban Ireland and has helped with the destruction of small communities everywhere? Bank of Ireland and AIB previously had branches in places such as Waterville and Sneem and throughout north, south, east and west Kerry. Those services of the commercial banks are now gone because they abandoned these rural areas. The one thing that is left standing in those places is the post office. Therefore, I see community banking being the lifeline for post offices. The Government and An Post keep referring to the new "e-payment account". However, that is not a full banking service and will only have a minor impact on the incomes of individual post offices.

I believe the Irish Postmasters Union took its eye off the ball over An Post's mail consolidation that is causing significant financial strain for postmasters nationwide. Action is needed now to prevent widespread closures and to prevent the collapse of the post office network. I suggest the introduction of a Bill based on the Private Members' motion passed on 17 November 2016 as a matter of urgency.

From my daily contact with postmasters, not just in County Kerry but throughout the length and breadth of the country, I know that the post office network is in serious danger of collapse. A number of years ago I predicted that of the 1,140 post offices, at least 500, 600 or 700 would face imminent closure unless drastic action was taken. That is why the Private Members' motion was passed unanimously in November. That is why a Bill enacting the provisions of that motion is now needed to secure the future and to introduce community banking.

Postmasters are not looking for a bailout from anybody. All they are looking for is the ability to increase the footfall going through their doors. The additional services that are centralised in county council offices could be delegated to post offices to accommodate elderly people.

Why should a person in his or her 80s have to drive to Tralee to get a photograph taken for a driver's licence? That is crazy. Why should people have to do a round trip of 120 miles just to get a photograph taken? It is nonsensical. Services like the driver's licence service should be available in our post offices. Post offices are already equipped with the most up-to-date technology. They do not need any further updating. All they need is the opportunity to offer more services to customers. If more services could be decentralised to local post offices and if they could offer community banking, that would ensure their future survival. We should learn from the Kiwi banking model instead of taking the same route as that taken in England when more than 10,000 post offices closed. Surely we should learn from the mistakes of others and model ourselves on those countries which were successful in steering their post offices away from disaster.

Unfortunately, I cannot agree with what is being proposed in the Bill. That said, I appreciate where the Minister for Communications, Climate Action and Environment, Deputy Denis Naughten is coming from. He was placed in a very difficult situation given the financial situation within the An Post group. I hope that at the end of this process we can work together to enact a Bill that will save the post offices. I do not want to see the last remaining facility in many rural communities going by the wayside. We have lost so much already with the closure of creameries, small pubs and shops. We are now in danger of losing post offices too.

I am glad to have the opportunity to speak to the Bill which is very important, especially to those in rural Ireland. Many people in north-west Cork and parts of east Kerry are very worried because the post office in Ballydesmond is due to close at the end of February. They are hopeful An Post will issue a tender for the service again and that someone in the locality will be successful in getting the contract and will keep a post office open in the village. The Ballydesmond post office is very important for the vast rural area of east Kerry and north-west Cork. Many people working in that area use the post office regularly. Munster Joinery employs almost 1,400 people and Kelly's of Ballydesmond, a big civil engineering company is also a significant employer. Indeed, there are four or five big employers in that area and a post office is needed.

The post office in Ballydesmond, as with many parishes, is one of the last facilities available that make the place a village. Most of the other facilities and services associated with villages have gone, such as the creameries, small shops and pubs. If Ballydesmond were to lose its post office, that could signal the end of the village and the identity of the community would be lost. Down the road, only a few miles away, the post office at Knocknagree is due to close in March. We are not so sure if someone will tender for the contract because there is no other shop in the village. There was a little shop in the post office but that is due to close. It is very sad for the community in Knocknagree, where Sliabh Luachra music and the best of Irish traditional music is played regularly. Knocknagree plays host to many big music events and it would be very sad to see the parish without a post office.

Not enough is being done to ensure post offices remain open. We have had Bills, promises and so forth, but all that is needed is for more work to be given to the post offices. Sadly, the last Minister for Social Protection, Deputy Joan Burton, instructed her officials to tell social welfare recipients to provide the Department with their bank details in order that their payments could be transferred electronically via the banks. That did an awful lot of harm to rural post offices. People did what they were told and the post offices were left behind. As the previous speaker said, more work should be given to the post offices. The driver's licence service and many other services and schemes could be administered through the post offices.

An increase in the price of stamps is not the way forward. If I was to increase my rates by 30%, I would not last more than a couple of days in business. I will not be supporting the increase in the price of stamps. I am sorry that I cannot support it but some other way will have to be found to deal with the financial issues. Such an increase will signal the end for An Post completely.

I am pleased to speak to the Bill. First, I convey my good wishes to the Minister for Communications, Climate Action and Environment, Deputy Denis Naughten. I wish him a speedy recovery. It was an awful trauma for himself and his wife, but I believe he is making a good recovery. I hope the Minister of State, Deputy Kyne, will pass on my good wishes.

I am appalled by this situation because in the negotiations on a programme for Government, 90% of which were attended by the Minister of State, rural post offices were a big issue. The rural Independent group, including Deputies Michael Collins, Noel Grealish, Danny Healy-Rae and Michael Healy-Rae, prioritised this issue because it is a very important one. What is the point in having a programme for Government if the Department is just going to decide unilaterally to increase the price of stamps drastically? It is easy to tell that there are not many business people on the Government side of the House. The proposal is to increase the price of a stamp from 72 cent to 95 cent or €1, which is an increase of almost 40%. As Deputy Danny Healy-Rae said, no business could sustain this. That is not good planning or good management. It is just a knee-jerk reaction.

The Kerr report on the rural post office network was published several years ago and there have been a number of other reports. As a previous speaker said, we had crocodile tears from the Labour Party and others in government in recent years. Deputy Michael Healy-Rae, myself and others brought letters into this House that people received from the Department of Social Protection encouraging them to provide the Department with their bank details. The Department was actively taking away business from the post offices. I have to declare an interest because my sister is a postmistress. I have not spoken to her about the Bill before us but I know the social value of every postmistress and postmaster in the small rural post offices. They have given sterling service over the years. Rural posts offices have acted as community alert centres, interpretative centres and tourist offices. Postmasters and postmistresses would notice when a person did not turn up to collect his or her pension. Many times people who had collapsed in their homes were saved because the postmistress or postmaster noticed they had not turned up on Wednesday or Friday to collect their pension and raised the alarm. Post offices provide connectivity.

Recently the rural Independent group introduced a Private Member's Bill in the House. We put a lot of work into it. We had to find out who was the Minister with responsibility. That was the biggest difficulty. We thought it was the Minister for Communications, Climate Action and Environment but then found out that it was the Minister of State at the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, Deputy Michael Ring. We put an enormous amount of work into getting the Bill ready and received agreement from the Government that it would accept it. Members from all sides of the House spoke on the Bill, but where is it now? The Government has come up with this drastic action and our Bill is null and void. This House is reduced to a talking shop again. We need to see where the problem lies.

The Minister of State referred to various aspects of this issue. He said that the trend in An Post has been evident for some years but that it accelerated in 2016 with the company experiencing a doubling of the year-on-year decline in postal volumes, resulting in a serious financial impact. The Government's answer to this is to increase the price of stamps by 30% to 40%. Children in kindergarten or first class would not do that. As Deputy Danny Healy-Rae said, if he did that in his business he would close within a week. I am in business and I, too, would close in a week. No business could sustain it.

The Minister of State has pointed out that the mail business still accounts for almost two thirds of An Post's revenue and represents 78% of the company's payroll. That is fine and I salute the workers who do a good job. The Minister of State went on to say the company was entering a period of significant change to try to cope with the rapidly changing environment in which it operated.

In this regard, the company has started a fundamental review to identify necessary strategic changes in restructuring. This is jargon which was written by some of the Government's advisers or officials. It has been staring us in the face since before Fine Gael went into government six years ago and Fianna Fáil was in government before it. It is quite obvious to anyone with a nose on his or her face. The Government is looking in the wrong place, as it is on so many other issues. It is looking at the problem as being postmistresses and postmasters in small sub-post offices, but they only receive a tiny transaction fee for all they do. The Government is trying to take the business away from them and now it is stating it will increase prices which will kill it off altogether.

We have just finished a great year celebrating the 1916 Rising. I ask the Minister of State to look at the GPO because that is where the problem is. I have it on good authority that the problem is in headquarters. He should look at the costs incurred there and ask whether there are people who are not gainfully employed because of union and other sweet deals. It is there and in other big post offices where the money is being siphoned off. I do not want to deny anyone a job, but I do not and cannot condone what we have had in Cashel hospital for the past eight years where people have been paid to be idle. That is madness and it is not fair to the workers involved. The elephant in the room is on O'Connell Street, in the famous building in which we saw so much happen last year - the GPO. We should look no further than it. Both there and in some of the bigger post offices throughout the country there are huge costs, while others deliver the post in all weather conditions and on bad roads to distressed people. We are not looking at the main problem because of sweet and cosy deals and agreements done, perhaps not by the Government, but it is not acceptable. Union representatives can come here, as can postmasters, and whinge, cry, moan and groan, but let us be honest with ourselves and the people. We are in the middle of a deep recession and hope we are coming out of it, but we must weed out such practices. They are in certain parts of the public service, but there is no place for them in an Ireland that is struggling and recovering. We must look at where the problem is. We are awaiting the Kerr report and wondering when we will receive it. I am not saying Mr. Kerr is, but people are afraid to face the reality and look at the elephant in the room sa GPO agus in áiteanna eile. They went there for noble reasons at the time.

When our Bill was debated, I said "Use it or lose it." I genuinely thought that when the Government accepted it, it would act on it in good faith, but it has not done so. This is not a solution but a knee-jerk reaction. It is like cutting off one's hand if one has a spot on top of one's finger. That is what it is. There will be a 30% to 40% increase in prices, but more and more business will be lost. Therefore, it does not make sense. Businesspeople are struggling and need services. They use postal services. There are people, including my children, who do not send anything by post. They use IT facilities, but this is damaging. We have seen it in the past 15 years; it is not today or yesterday that it has happpened, but this is a knee-jerk and desperate reaction, a desperate effort to avoid facing the real problem. It should be dealt with and the unions should be challenged. If I am wrong, I will come back and correct myself, but I do not think I am because this is what I have garnered and been told. I was not told by whistleblowers, but it is known and it is happening in other areas such as the HSE. It is not fair to those on the front line who struggle and suffer on a daily basis in doing an honest day's work for an honest day's pay. This issue should have been dealt with years ago.

I do not blame the Minister of State for all of this, but it is a cop-out and I cannot support it because I am a businessman and it would be totally against every vein of intuition in my body and business sense or nous I have to think prices could be increased by that much when the business is declining. They should be cut to try to increase business. We all had to cut our prices drastically in the past five or six years to hang on in. Some cuts were forced but more were agreed to. Anyone involved in business will state this, including shopkeepers, but the Government is out of touch. It is in a bubble, as was said earlier, but that bubble will burst very soon and the Government will up in smoke when it does.

It is important to put the history of the postal service in context because it is a survivor and in 2000 celebrated its tercentenary. There has been a postal service since 1700 which has been capable of change over the centuries. Mail has been delivered by stagecoach, the railway system which played a big part and mechanised vehicles and we are now going through another period of change in which technology is playing a part. We know that email, text messages and other electronic means are now the preferred way to engage in speedy communication. However, notwithstanding any technological advancement, there will always be a pivotal place for traditional postal services for business and personal use. Many online retailers to the forefront of technological advancement are dependent on traditional postal services to deliver goods to their customers. The postal service has been capable of change and I have no doubt that it will continue to be so, but it does require support and to do things differently.

The Bill seeks to remove the price cap mechanism and provides for ComReg to undertake a review of the consequences of removing the price cap. However, the review is not be due to commence until two years after the Bill has passed. In the meantime, it has already been indicated that the purpose of removing the cap is to allow price hikes to generate cashflow for An Post. An immediate increase in the price of postal services will add to the already exorbitant cost of living and doing business in Ireland, something that should not be taken lightly. An Post and the post office network nationwide are in danger. We know from various representations made by post offices and postmasters that they feel vulnerable and the reduction in the amount of State services administered through the post office network is of particular concern and threatens the survival of many. There is plenty of evidence and we all see it when people show us a letter from the Department of Social Protection in which it is presumed they have bank accounts and they are pushed towards receiving payments through them rather than at the post office. We are also aware that services such as bill payment and that stamps and gift cards can be obtained in shops other than post offices. I am aware that in 2014 ten supermarkets were part of a trial. I do not know the results, but according to An Post services followed the footfall. What those running post offices tell us is that this drives away footfall they would otherwise have and that people would engage in other transactions if they went to the post office. It is not just about buying a stamp conveniently; it is something of importance.

A lot of the conversation has focused on the rural post office network. Of course, post offices in rural Ireland are vitally important, but post offices in urban areas are just as important. We have seen the withdrawal of banking services in communities with an older population and in which there is less demand for banking services, as well as in poorer communities. It is not exclusively a rural issue, but having said that, I accept that it is more dominant in rural areas. There is also the social aspect of people going to the post office to collect their pension and someone knows if they have not turned up. This is a valuable role; it is not a tangible return, but it is the reality. With this in mind, long term we need to look at solutions to the threats facing the post office network and how we can best support it and acknowledge its vital place in Irish public life. A price hike now is a short-term fix which may do further long-term damage to the sector. Either way, the answer to the ills of the post office does not lie in isolation. Price hikes can and will be counter-productive. We must, therefore, look at ways in which we can realistically increase the functionality of post offices to bring them up to date, while also giving us an opportunity to use the network to deliver services to communities, with far-reaching benefits to society.

Post offices have changed over time. In the 19th century, they were places people one went to get information, which is very similar to how individuals use websites now. At the most recent election, the Social Democrats put forward a proposal for a viable community banking sector using the already existing post office network. The timing in this regard could not be more appropriate as the post office network is in trouble. There has been a post-banking crash, a recession and a bailout and trust in traditional banks is at an all-time low. The vast majority of people would rather bank with publicly-owned or community-owned institutions. Households and small businesses are finding it difficult to secure loans and are increasingly frustrated with a banking system that works against them, not for them. There are issues of trust and responsiveness. A report commissioned by Irish Rural Link found that improved access to finance will be a vital component of continuous economic recovery and development, especially for Irish small to medium businesses and people across the country. The SME sector is one of the sectors most exposed to Brexit and Enterprise Ireland-supported companies represent approximately 5,000 different companies employing 192,000 people right across Ireland. It is a very important sector and the post office service could be a support to that sector.

There are approximately 1,100 post offices throughout the country and these provide a ready-made branch network, with a physical presence in towns and villages up and down the island. We proposed a plan which would see the State and Central Bank work with the Credit Union movement and the post office network to build a strong community banking sector. In the United Kingdom in 2012, the relationship between Bank of Ireland UK and the Royal Mail was extended and the post office financial relationship has delivered over 2.8 million customers, a savings book of more than €17 billion, a loan book of €3 billion and a comprehensive range of financial products, including savings accounts, mortgages, motor and home insurance and credit cards. A part-Irish-owned bank provides the service we are looking for in the post office system here. There are some 11,000 branches too, approximately ten times the number that we have in this country. The expertise is there, it is already happening somewhere else and it can happen here. Customers of local post offices could have full current account facilities, including access to debit cards and online banking. We also propose a feasibility study of the possibility of post offices operating enhanced services, similar to what I have just spoken about. We have to have a greater vision than to just keep increasing the cost of the stamp. That vision must keep pace with the changing times and provide the mechanism needed for the post offices to strengthen their valued position at the heart of Irish communities, in both rural and urban Ireland.

An Post is a very highly-respected company in Ireland. The postmasters have been there for several hundred years and have gained real trust among people. Trust is a not an insignificant aspect of any business and it is vital in terms of dealing with people's money, social welfare payments and savings. An Post deals with over 1 million transactions every day and has the skills and competences to do that efficiently and quickly. However, this company is in real crisis. The scale of that crisis should not be underestimated by anyone in this House. Last year we discovered the figures showing the downturn in core business mail, which is two thirds of the company's business. Instead of the expected 3.5% decrease in volumes in a year, those figures showed that the reduction was almost double that, at 6.7%. That is why we are considering this Bill and why there is real concern for the future of the company and for its people working in urban and rural post offices and in every aspect of the network.

I have a real concern that the provision for increases in the cost of a basic stamp could precipitate that crisis into a really fast downturn. I know why it is being done and there are no easy options but consultancy reports suggest large mail volume users such as banks and telecommunications companies, who are among the last big users of this service, will flip very quickly and the company will not only lose the Irish Water charges mail. I understand the company has already lost one of the big banks - perhaps the Minister might confirm this. When the price rises go through then, perhaps within a matter of months, rather than yielding an increase in revenue to give the company the room to get into an alternative business model we may see a further precipitous fall in volumes and revenues and this will not create the conditions to allow for the restructuring of the company that everyone agrees has to take place. This is my primary concern with regard to this legislation.

Whether I am wrong or right, there is only perhaps one year for the company to completely reconfigure its business and to start developing other revenue streams to cope with the ongoing downturn in mail revenues, which is almost certain regardless of whether or not we increase the price as expected.

I will reflect on from where a couple of new businesses might come or the circumstances in which a new model of engagement might happen. The first, as many previous speakers have suggested, is in the area of financial transactions and banking, which the company is already developing. We have to be careful about that. I remember, from bitter experience, having to be part of the management of the closure of Fortis Bank, the previous incarnation of development banking activities. I asked the people involved what their core business was, where the revenue was and how profit was going to be made and a glint came into the eye of the executives - good people - as they suggested mortgages would be where they could make a handsome profit. It was part of the culture of the time and the world and his wife were thinking they would make money out of mortgages. That was a huge mistake. I do not think we will turn An Post into a mainstream big commercial or mortgage bank. I do not think it will have the expertise in that regard and while we might try to develop the expertise in other areas, I do not believe it will be in An Post. It should be possible for An Post, in conjunction with credit unions and other institutions, to develop the new-style banking system, which is developing around the world, which uses mobile apps to put everything online, such as cash and payment services as well as microlending services. This will serve smaller-scale domestic businesses and will provide very small SME lending without big risks and with different expertise. There is a need to do something significant in public banking for SME lending at levels around €30,000 or €50,000 and we will be publishing legislation in this regard. One has to lend to make a profit in banking but with large volumes, small margins and highly-automated low-cost payment systems, the post office network can move into that space.

Second, Mr. Bobby Kerr's report goes through some of this, but there must be a facility for the development of An Post's parcel network, which could also evolve into a transport network. In rural post offices where vans deliver parcels, is it not possible to integrate that system into a rural transport system? It may be unorthodox, but it could still provide connectivity, savings and an increased revenue stream by delivering parcels and helping to carry people at the same time. It could also be seen as an exporting capability, particularly from smaller rural areas where small businesses need that level of connectivity to reach customers.

Third, and perhaps most importantly, is the core communications business. An Post defines its mission as a communications business; therefore, the company should be moving into digital communication services provided locally through this network. Public trust in the brand can be used to become innovative in order that An Post could become a leading public company in providing a whole range of digital services.

When I look at what I pay daily for various communications systems, it may not be usual because Deputies must have a range of different services. I am paying Dropbox, LinkedIn, Google and a raft of media companies for a range of services. I am paying for telephone and broadband also. Some of it is bundled but one has to pay for that stuff now. I want to store all my material online, including photographs and family videos. As I want that material to be there for the children and grandchildren, I am paying all these American companies, even though each one is a small payment. I am paying Google because I breached my 15GB limit of free data, but I am paying €2 or €3 per week for it.

All those services are being provided by international companies, but why can we not look at a State company to provide them? We know that such a State company will be here in 50 or 100 years time. It might give us some security for the nature of our data, so we do not have Facebook or others changing the rules every few years to suit their purposes. Instead we might have a company that we could trust. We would know they are not just out to use one's data for advertising, but to provide a safe and secure place to store data, which could operate online and does not necessarily require a physical network.

It would work well with an outlet to provide that sort of contact point for a range of different digital services that might be provided by such a company which is used to dealing with large transactions. It has our trust, unlike some of those social media and other international companies. I think there is a future in that. It would require a leap of imagination, a change of management and a change in how workers see the nature of the company.

We have no choice about this, however. If we just stick to business as usual, those workers will face an even bleaker future; therefore, it has to change. We could examine many other services also, but An Post should be the centre point for the State's provision of services - not just motor tax renewal, but every aspect in terms of a contact point for the State, including agricultural forums and questions on every service the State provides. It should be a State information office to provide an increased level of transactions which we need to make the system work.

Whatever happens to the Bill and the price cap, my fear is that it could precipitate a real crisis in terms of a drop in volumes and revenue. I am minded not to support the Bill because of that fear, but I will support the Minister, whichever one it is. We have a real problem in that we do not know which Minister is really responsible. It is mad the way in which the responsibilities of this company have been divided. Whoever takes the reins will have a tough time, but this House needs to work collectively to help the Minister and the company to take a completely different direction. That company is hugely important for the future of the country.

I welcome the opportunity to speak in this debate. The main purpose of the Bill is to repeal the price cap mechanism currently in place for universal postal services which in turn will give An Post increased flexibility in its pricing.

There is no doubt that the post office network is facing huge challenges. One of these challenges is the fact that An Post is losing money and in the past seven years has incurred losses of €340 million. These losses are unsustainable and action needs to be taken to ensure the postal service has a viable and sustainable future.

In its assessment of the company, ComReg has established that An Post did not meet its efficiency targets of 2% per annum. Also, it did not price to the maximum allowed under the existing price cap. In addition, ComReg stated An Post was unlikely to break even on the services it provided that were subject to the price cap. With this in mind it is important that measures are now taken to ensure the postal network is protected and legislation is put in place to underpin its future.

Post Offices are an integral part of Irish society and must be fully protected in order that their future can be secured. I am mindful of the fact that An Post is operating at a financial loss and this must be addressed.

I read the Grant Thornton report which was published in 2012. It identified three main revenue streams for An Post - traditional mail services, Government contracts and financial services. It also identified potential future services that An Post could provide, including motor taxation, an extension of the banking services currently available, household charges, local authority charges and hospital charges.

It is interesting to note that the report also highlighted what were identified as future opportunities for An Post, including a restructuring of local government, additional Government charges, an ability to extend business in terms of capability and infrastructure, increased community interaction and technology related solutions including tracking, digital displays and phone applications.

Banks are facing cost pressures and seeking alternative solutions, while An Post has the required capacity to expand. Whilst highlighting the challenges faced by An Post, the Grant Thornton report also emphasised that An Post has a viable future.

Another report I want to highlight is the Kerr report which was published in January 2016. That report came about as a result of the establishment of the Post Office Network Business Development Group in January 2015 with a mandate to produce a report that would explore potential commercial opportunities available to the postal network. The report was developed following an extensive consultation process where the group engaged with a variety of stakeholders including those in the public sector, commercial bodies, post office customers and other interested parties. The report identified the principal activities that currently underpin the postal network including processing social welfare payments, processing State savings products, bill-pay transactions for electricity, gas, telephone and waste, licence collections on behalf of public bodies, money transmission services, agency banking transactions on behalf of retail banks, foreign exchange services, postal services and gift vouchers. The report clearly recognised the value and importance of the post office network as a key piece of rural infrastructure that could revitalise rural communities. I strongly agree with that view. As I stated, the post office network is an integral part of Irish society. It must be protected and made sustainable.

With regard to safeguarding the future of An Post, the Kerr report identified 23 recommendations that it considers would be central to the future sustainability of the network. In my constituency of Louth and in Meath East there are many rural areas that depend heavily on their local post offices, including Ardee, Louth village, Dunleer and Carlingford, to name just a few.

The Kerr report clearly identified that the network needs to be renewed and modernised. It also recommended that the Government and An Post agree a business model to facilitate the introduction by An Post of payment accounts for social welfare clients.

These payment accounts could also facilitate the use of a dedicated debit card, full access to ATM facilities and the use of standing orders and direct debit facilities. The report also identified that the payment of motor tax through the An Post network should be considered. One of the recommendations that must be looked at very closely is the proposal that An Post develop a formal structure with the credit union movement either through a representative organisation or interested unions to establish the potential scope for a link-up.

Another interesting aspect of the Kerr report was that it suggested we put a monetary value on the social aspect of the post office network. This is something about which I feel very strongly. We should put a monetary value on the social aspect of the postal network. The report also highlighted that there may be opportunities for An Post to provide additional services to the small and medium enterprise, SME, sector and this again is something that we must investigate further.

At this stage, it is important to state that the programme for Government also provided for commitments regarding post offices. The programme for Government committed to acting on the recommendations of the Kerr report and this I welcome. I am also pleased that the Minister of State, Deputy Michael Ring, has established a working group to examine and identify potential models for how post offices could act as community hubs, particularly in rural areas. As I said, we must protect the post office network. The establishment of these working groups will go a long way to providing a way forward for the network provided the recommendations are acted on.

I record for the House my complete support for the retention of the postal network. The postal network is part of society and too many depend on it. We must not diminish the role of the post office but must continue to support fully the concept of the postal network and develop a strategy that will modernise and safeguard the future of An Post. Rural areas, in particular, must be reassured that there is a future for their post offices and that we in the Fine Gael Party will do everything in our power to ensure there is a bright future for the postal network.

I am delighted to have an opportunity to speak about this especially important item. We have been speaking for many years about postal services and alternative services that might readily be provided through the post office network, but there has not been a whole lot of progress. It is something in respect of which there was an obvious need for change. There was a need for change to move with the times and to face the threat coming from modern technology. I agree entirely with Deputy Eamon Ryan's analysis because An Post has a network throughout the country, which is a huge advantage. It has daily access to every locality in the country through the delivery service. It has counter services in place throughout the country. It is a considerable network. Somebody mentioned the number of couriers that are taking over and that is a question in itself. An Post has the network and could fill that void. An Post allowed that service to develop and could intervene. I know that it has similar services to a certain extent, but the fact is it is there to be delivered on.

We need to look for the compatible services that can be added to An Post through the utilisation of its counter services and national network. That can be done. Reference has been made to banking. I was never 100% certain that banking in the traditional sense was suitable to bolt onto An Post but certainly post office savings accounts and similar are. Rural transport has been referred to. I have spoken about this in the past. It could be linked into An Post. Again, there is a transport system An Post has to use to deliver correspondence, letters and mail throughout the country every day, so there are certainly opportunities there that could and should be utilised for the future. Considerable savings can be made if compatible services are identified for administration through the post office service throughout the country. Rural transport is one that comes to mind. We already have rural transport systems to a certain extent in certain parts of the country, but we often hear about the rural restaurant or pub which is dying for want of patronage. Of course, there is a simple way to deal with that. Provide rural transport and bolt it on if necessary to some of the services that are required.

Speakers have referred to mobile phone services and the fact that bills are now issued electronically. I am not so sure that this is necessary. It is a considerable irritant to many who cannot see a bill in their hands, in particular older people, and who get annoyed when they get a text to say their bill is due and should be paid. Incidentally, these are lucrative services that are being provided by mobile phone companies. Postmasters have first-hand experience of what might be suitable. We have mentioned some of the things about which they have spoken. The list is endless. One can go on and on and identify suitable services to attach to utilise counter services, the network services and the centralised system of An Post to great advantage both for An Post and communities, in particular rural ones.

I do not accept the notion that there is a plan by Government to close all the post offices and that this has been in offing for some considerable time. I drove past the post office on Thomas Street for a long time and there is a closed sign on it for many years now. I do not know who closed it but maybe they opened another one somewhere. The fact is that this has been going on for years. There is a problem where the postmaster or postmistress retires in a particular area and the position is not seen as attractive by anybody else. That has to be addressed. The means have to be found to ensure that a younger person or anybody else who takes over wishing to provide postal services in his or her area as postmaster or postmistress finds taking on the job sufficiently attractive. That is particularly so where there are rural enterprises that require regular postal services.

One of the things we seem to forget from time to time is a matter I have raised with my local authority recently. If we adopt a policy, as there is a tendency nowadays to do, of discouraging the building of any indigenously required houses in rural Ireland, we will eventually cease all development in rural areas and there will be no need for any services. I have spoken about this many times, as have others. It is fundamental to what we are talking about. If the population goes down, a number of things happen automatically. The number of rural schools comes under threat straightaway. That is the obvious thing that happens. Rural services generally, like dispensary services, all come under threat as a result. Decisions by planning authorities in each local authority area should have due regard to the need to try to accommodate, in keeping with good planning principles, the indigenous rural population which is encouraged nowadays to move to urban settlements. I am not sure why because no one has ever told me, notwithstanding the fact that I have been around this place for a long time. It is for economic purposes, of course, because the provision of services in dispersed rural areas is not economical. I can understand it might cost a little more, but it is not always possible to have the best of everything, the cheapest of everything and the most cost-effective of everything while also having a stable society.

One of the things we should always remember is that there has always been a rural community throughout this country. Professor Caulfield in Galway has spent some considerable time saying as much and calling for the recognition of that principle in recent years. As such, I note that this is also an issue and that it affects us in all parts of the country. Urban blight is another contributory factor if one looks at the number of premises throughout the country in towns and villages and even in this city which have been unoccupied and disused for years.

That automatically has a negative impact on the requirement for services such as those provided by An Post. If we continue along those lines and build new replacements in new urbanised settings where population is concentrated, there will be no need for An Post or any rural services.

Other Members referred to driver licences. I would have thought it was an issue that should have been seized upon by An Post when the time came but that did not happen. It was a mistake and something that could have brought An Post back into the scene.

As long as older people are living in rural Ireland, quite a number of whom live in isolated places, there will be a need for a focal point where they can go to dispatch their utility bills. Such a service is in place but if post offices disappear, the service will not be available. There is a necessity to ensure we continue to maintain post offices throughout urban and rural Ireland.

Those who say it cannot be done should note it can be done, but we must be imaginative and think of the extra services that can be bolted on to An Post and which it could undertake to enhance, expand and extend the quality, content and value of the services it currently provides. This has had to be done in many other countries and continues to be the case. There is no end to the amount of innovation we can call upon to do the best we can in this area. They are a number of the options one can readily identify which need to be examined.

I compliment the Minister of State on introducing the Bill because it had to be done. While I understand what Members have said about the increase in the price of stamps dissuading people from using services, I am not sure that is the case. We have one of the cheapest postal systems in Europe in terms of stamps. It should not necessarily be that way and we have to have some recognition that we need to pay for some of things we enjoy. There is no use saying that we want everything for free and blaming somebody else when things do not happen that way. We should not expect things to happen that way.

If we are realistic and accept we must do something and that An Post has within its current structure all of the means to deal with the situation and deliver an expanded, effective and efficient service throughout the entire country, we are on the right track. I hope this intervention has an impact on the operation of An Post. If it does not, and that becomes obvious after a short period of time, we should return to the coalface and do something before it becomes too late. The worst thing that could happen would be that nothing would be done and the system be allowed to wither on the vine. In that case, the post office network would become obsolete, which would be a tragic thing to happen. I am quite sure that private enterprises facing such a situation would find various means to replace services.

I extend my good wishes to the Minister, Deputy Naughten, and hope he will be back in the House soon. I hope he is fit and well and able to take up his duties once again. I also hope that, as a result of ensuring that the Bill is brought before the House at this time, it has the desired and necessary effect in terms of addressing the obvious issues relating to An Post.

I wish to share time with Deputy Casey and others.

I join Deputy Durkan, the Minister of State and others in wishing my constituency colleague, the Minister, Deputy Naughten, a very speedy recovery. I have been in contact with him by text and he has been in contact with me. He appreciates all the good wishes and is making a slow recovery. It was quite a frightening experience for him and his wife. We all wish him well. Táim cinnte go mbeidh Denis ar ais sa Teach seo i gceann cúpla seachtain. That is what we all hope.

While this debate is one we probably would prefer not to have, it is necessary. It is necessary for those of us on the side of the House to support the Government, albeit reluctantly, because nobody wants charges to increase. We have to consider the consequences of what may happen if we do not.

The Bill is very much a stopgap move. Every Member of the House, in particular those who have spoken against what is being proposed, needs to realise the consequences of what we could face within a couple of months if we do not make the tough decisions that have been proposed regarding increasing charges.

The post office service could collapse. What would that mean? It would mean a number of post offices would close and workers would lose their jobs. It would probably mean that there would be a reduced postal service. We are very fond of having our post delivered every day but if An Post runs into a deeper financial crisis, there is every possibility that we would have a very much reduced service. It may not be the most popular thing to do, but the reality is that it is a necessary move at this stage.

This crisis has built up over a number of years. During every debate on the closure of a post office, I emphasised the importance of technology. We cannot and do not want to stop technology but the reality of what has happened to the post office service is, in many respects, a case of technology taking over.

Before Christmas I asked the Taoiseach about the state of the postal service. I expressed concern at the time and asked whether the Minister, Deputy Naughten, the Minister, Deputy Humphreys, or the Minister of State, Deputy Ring, had responsibility in this area. One Minister should have such responsibility. I also said that unless something was urgently done, the service could collapse and that would be serious for many parts of the country.

I conducted a survey of a class of about 78 students from a local secondary school. I found out that only one out of the 78 students use the post office. All of the younger generation use technology. They are not posting letters; everything is done electronically. That is the reality. We should have seen this coming many years ago and built up new services in post offices. There was no way that every rural post office would maintain a service. The reality was that some would close. We could now face a very difficult situation whereby many more would close because of what has arisen.

The sorting of post, which took place at county depots, has been regionalised, which was the wrong move. Many people in business tell me that the postal service is no longer as efficient. Was that a bad move? In addition, there was a deliberate policy of trying to take people away from dealing with social welfare payments in post offices. The policy may not have been trumpeted but nothing encouraged people to continue to conduct their social welfare business in post offices. The banks became involved, which was a pity.

We need to ensure that in towns where banks have closed and no credit union is available, post offices are maintained and allowed to provide banking services. It is really important for such towns that banking services are kept in place.

I will hand over to my two colleagues shortly. Supporting this action is not the most popular thing to do but my party and I recognise that this is a critical situation. While the proposal is to increase the charges significantly, as I stated, we have to consider what might come down the road in the short term if we do not act now. We all know and accept that a massive reorganisation is needed in An Post. The McKinsey report is due out in June and I am sure there will be a lot of food for thought in it, but in the meantime we must try to save as much as the post office service as we can. No doubt, however, in the coming months a number of post offices will close.

I also send my best wishes to the Minister for Communications, Climate Action and Environment.

This is the first urgent Bill to assist in the people’s legitimate desire to see An Post survive, adapt to a changing world and continue to provide its crucial services to all. As such, it is to be welcomed even if its effect will see the cost of certain services rise. The urgency of the Bill, while welcomed, has not been accompanied by urgent Government action in the retention of postal services for all the people. I note that another purpose of the Bill is to give An Post further remit as the universal service provider of postal services, which again is laudable. However, any reasonable person looking at the Bill, which claims to enable An Post to be a universal postal service regardless of geographical location, will probably be very puzzled, as was I. Perhaps I am wrong. However, An Post providing a universal postal service, regardless of geographical location is a fine statement that is similar to the language the new President-elect uses. It does not stand up and is simply not true to reality.

While we are talking about protecting this universal service provider, regardless of geographical location, An Post is closing rural post offices throughout Ireland. Just before Christmas, when I should have been expecting a Christmas card, I received a telephone call from An Post. It informed me that my local post office in Laragh-Glendalough would be closing in January. This was shocking enough but, when we look at it further, the decision does not make any commercial sense. Laragh has had a post office for more than 150 years. The reason it has had a post office for this length of time is that Laragh is located beside one of Ireland’s oldest and most popular visitor attractions, the monastic city of Glendalough and the spectacular valley that surrounds it. Laragh is a small village in Wicklow that happens to receive 1.5 million visitors a year. It is worth repeating that An Post is about to close the post office in Laragh, where there are 1.5 million potential customers a year. Most businesses I know would break their necks trying to get access to such a potential market but An Post decides to close the post office and to do so over the Christmas period in order that nobody will notice.

The people of Laragh and Glendalough noticed and I commend them for their swift actions in defence of the service. When I arranged a meeting with officials from An Post, I was told that it was surprised at the lack of feedback from the public during the consultation period. Not one submission was received. I informed them that this was because the public had not been consulted and that this reason alone should delay the decision. The post office in Laragh should be an example of how the Government is listening to the people and attempting innovative flexible solutions while taking advantage of the unique opportunities that this rural Wicklow village offers. When it comes to political leadership on this matter, however, it seems that the Department believes that the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs is in charge because of the rural post office network group that is co-ordinated from the Department. Confusion when it comes to political leadership is dangerous.

The Government continually talks about listening to the concerns of rural Ireland and responding with actions, but its fine intentions will mean nothing if rural post offices continue to close. If An Post management cannot find the business sense and, dare I say it, the cop-on to see the opportunities that lie in Laragh, what credibility will any promise to protect rural post offices in other parts of Wicklow or, for that matter, Ireland have? All the Ministers involved in this area of policy are rurally based Deputies. They know as well I do the value of the rural post office. If An Post will not act, I implore the Ministers to act to ensure An Post implements the actions in the Kerr report immediately and prevents the closure of viable rural post offices such as that in Laragh.

As a community, we are now asking the Minister to ask An Post to postpone the decision to close the post office in Laragh, to allow time for consultation which did not take place and discussion with all interested groups, to afford Laragh the opportunity to demonstrate how vital the post office is in our community, and to allow the obvious potential of a post office in Laragh to be explored and enhanced. If Laragh cannot retain a post office when it has 1.5 million potential customers, two hotels, five retail shops, two restaurants, 30 bed and breakfast establishments, additional seasonal commercial activity, a community centre that has won awards for innovation and is a model of how social enterprise can work and an expanding school, what hope is there for any rural post office?

I also wish the Minister, Deputy Naughten, a speedy recovery.

When I was growing up in Rathangan, County Kildare, one of the great institutions in our small village was not just the post office but the postmistress. She was a wonderful woman named Mollie Forde. She was a friend to everyone who supported everyone, young and old, and always gave advice and help where she could. There were queues both inside and outside the post office for all the services she provided. She knew everyone well enough to know when someone turned 18 and were to be placed on the electoral register. She provided that social service. Sadly, Mollie is no longer with us but, thankfully, the post office remains. I would hate to see or envisage Rathangan or any similar village or town not having the services of a post office.

In Ballymore Eustace, County Kildare, Sean Fogarty runs an absolutely thriving business. He had to diversify, be creative and look beyond the common to be able to provide the post office service he provides. A few miles up the road we have the post office in Twomilehouse. This great example of a rural post office was run for 50 years by Jim Valentine and his wife, Abina. Jim's mother was the postmistress before him, since 1938, which is almost 80 years ago. That post office and small shop operated from 7.30 a.m. every day for as long as anyone in the locality could remember. The kitchen table was the sorting end of the business. Coming up to Christmas, the Christmas cards would be laid out by county and the turkeys were brought in for Abina to send to England and further afield. Quite often, she had to kill the turkeys herself. That was the process many years ago. Sadly, just before Christmas the Valentines retired and the post office network put the business out for tender. However, no offer has been made yet. This relates to the fact that small rural post offices now operate for less than the equivalent of the national minimum wage. As such, they are not viable business propositions, but the whole community is losing out on a vital service. Places such as that of the Valentines, Sean Fogarty and the post office in Rathangan have played a vital social and economic role in the communities they serve. We need to acknowledge that with a reduced income and footfall, the future of this type of post office is in danger.

The Grant Thornton report states we are at risk of losing between 450 and 500 of our 1,300 post offices by the end of this year if the situation is not properly addressed. The report also reminds us of the intangible benefits provided by post offices.

They include the significant trust and goodwill the post office network has developed far and beyond its capacity with its customers, the role of the local post office in social inclusion and in acting as a conduit for two-way information flow and of caring and the knowledge that postmasters and their staff possess about elderly, vulnerable and often isolated customers.

We need to act now to reverse the worrying decline of the post office network. While I do not necessarily agree with removing the bar on having a cap on the price of stamps, unfortunately, if it is the only step we can take now to sustain the network; it is what we must do. We must also introduce other measures, however, and engage in fresh thinking on this issue. I agree that a working group should be established to identify the potential capacity for local post offices to act as hubs, facilitate other services and function as one-stop shops for other Government services such as those on which commitments were given in A Programme for a Partnership Government. The payment of motor tax, for example, and other Government services could be facilitated through the post office network, as could the extension of social protection payments. We often hear of older people who do not have computer facilities or skills. The post office must be able to do this type of work as part of its remit, including by providing printing facilities.

To secure the long-term future of the postal service and maintain an active post office network, we need to introduce a broader range of resources and measures. The network is a vital asset, especially given the scope of the network and the number of people who work in it. Post offices must remain part of the Irish cultural identity. As well as their many practical uses, they serve as strong focal points for communities. It is vital that we defend this key national resource. If the measure proposed in the Bill is a short-term solution while other measures are considered, so be it.

Ba mhaith liom a rá go bhfuil mo bhean chéile ag obair do An Post agus suas go dtí le déanaí, bhí mo dheartháir céile agus a bhean ag obair do An Post chomh maith. Mar sin, tá tuiscint éigin agam ar cad atá i gceist nuair atá daoine ag caint faoi sheachadadh nó bailiú an phoist agus seachadadh litreacha timpeall na cathrach seo ach go háirithe. Tá sé rí-thábhachtach go ndéanfaimid cinnte de go mbeidh an tseirbhís seo fós ar fáil amach anseo. Tá dainséar mór ann dó, ach go háirithe toisc an t-athrú atá tar éis tarlú le deich mbliana anuas ach go háirithe. Ba léir go raibh sé ag tarlú fiú roimhe sin. Ach go háirithe toisc an Idirlíon, le cúpla bliain anuas tá athrú suntasach thar cuimse tar éis teacht ar dhaoine ag scríobh litreacha agus daoine ag cur billí, nuachtáin, leabhair agus a leithéid sa phost, ní hamháin in Éirinn ach thar lear.

Ní gá ach smaoineamh ar cad a tharla ag aimsir na Nollag. Cé mhéad daoine sa Teach a bhfuair téacs ag guí beannachtaí na féile orthu? Roimhe seo, bhí sé sin ar fad déanta i gcártaí Nollag agus cuireadh timpeall sa phost iad. Nuair a thoghadh mé ar dtús, bheadh an-chuid de na Teachtaí ag cur 2,000 nó 3,000 cárta Nollag amach ag gabháil beannachtaí na féile dóibh siúd a thogh iad. Níl sé sin ag tarlú ag an leibhéal sin a thuilleadh, seachas in áit nó dhó. Tá sé soiléir anois go bhfuil daoine tar éis athrú ar mhodhanna eile: an téacs, an ríomhphost, nó fiú fógra sa nuachtán áitiúil. Feictear go leor de sin. Dar ndóigh, déanann muid ar fad cártaí a chur chucu siúd atá gar dúinn, chuig gaolta agus cairde ag amanta áirithe. Ach, don chuid is mó, ní fheiceann mise go bhfuil an líon céanna cártaí - cártaí lá breithe, cártaí Nollag, cártaí Cásca nó cartaí ag amanta eile - á scríobh. Níl aon oiread céanna litreacha á scríobh. Ní hé nach bhfuil daoine ag déanamh comhfhreagrais lena chéile, ach níl siad á dhéanamh sa bhealach a rinne siad é deich nó 20 bliain ó shin nó le na céadta bliana anuas trí chóras poist éigin.

Tuigimid agus glacaimid leis go bhfuil gá le hathrú suntasach sa tslí atá An Post rite agus sa tslí a mbeidh an obair atá roimh An Post le déanamh amach anseo. Measaim nach féidir le haon chomhlacht leanúint ag sileadh airgid sa slí atá ag tarlú. Is léir ó na tuairiscí ar fad gur thuig siadsan a rinne na tuairiscí sin agus a rinne an fiosrúchán ar conas An Post a tharrtháil nó a shlánú go raibh fadhb ann. Is trua nach ndearna na Rialtais roimhe seo, ní an Rialtas seo nó an Rialtas deireanach fiú, ach b'fhéidir an ceann roimhe sin arís, gníomhú de réir an méid a bhí os ár gcomhair ag an am sin. Chuala mé roinnt de na Teachtaí níos luaithe ag rá gur chóir go mbeadh an Rialtas seo ag bogadh i dtreo an electronic fund transfer. Is cóir, ach ba chóir go ndéanfadh Rialtas Fhianna Fáil é chomh maith céanna tamall maith de bhlianta ó shin. Bhí mise ag ardú na ceiste sin tamall de bhlianta ó shin, chomh maith le Teachtaí eile sa Teach seo. An fhadhb a bhí ann ná nach raibh ceannaireacht An Phoist ag an am sásta bogadh sa treo sin agus fós tá an cuma air nach bhfuil siad sásta bogadh ar cheann de na mór-rudaí a chuideoidh leo i gcinneadh a dhéanamh ar fhéidireacht An Phoist maireachtáil nó gan mhaireachtáil.

If An Post cannot move on electronic fund transfers by facilitating all electronic financial transactions in the same way that banks and all other financial institutions can, the minor changes being introduced in the Bill, with which I do not agree, are doomed. Every other financial company, including a number owned by the State as a result of the financial crisis, is able to process financial transactions. EU directives prevent the Government from transferring all of its funds, whether grants to farmers or payments to social welfare recipients and community employment and Tús workers, through the postal service because the service does not have the facility to avail of this substantial wad of money which could be transferred through its system, obviously at some cost. This is a first and long overdue step that should have been taken, not by this Government or its predecessor, but much longer ago. If it were taken, a Government could take a decision to provide for all financial transactions other than international transactions to be made through the service delivered by An Post, a State company. This is an example of strategic thinking. This step would not involve a Government subsidy and, as such, it would not breach the EU rules on Government subsidies. It would be a commercial decision.

This scale of payment would be one way of keeping An Post afloat. The Irish Postmasters Union has been lobbying for this measure for a long time, especially during the term of the previous Government when the then Tánaiste and Minister for Social Protection, Deputy Joan Burton, tried to move as many social welfare payments as possible from the postal service to the banking system. She blamed An Post and the European Union but was eventually persuaded by Deputies to back off on some of her proposed changes.

The Department went as far as to change the application form for social welfare payments such that the first port of call was to ask recipients if they had bank accounts and then at which post offices they wished to receive their payments. This showed the attitude at the time. This is a simple although costly move for An Post which could save it money and help it to diversify into areas that could sustain it.

There are challenges facing An Post. As I said, my wife works for An Post delivering post or in the registration office sorting post, depending on what duty she is on in a particular week. As such, I have an understanding of this matter. I also have a brother-in-law who delivers post in Rathmines and a brother whose wife sorts post in the mail centre on the Nangor Road. I am well aware of the collapse in the volumes of mail in recent years. The workers have taken the hit resulting from that decline. In Dublin, delivery routes have been almost doubled at this stage, albeit those who deliver the post have less post to deliver but they have to go further. What they have found very interesting in the past number of months in particular is the huge increase in the number of parcels they have to deliver because people are buying online. This post is more bulky. I heard Deputy Eamon Ryan and other speakers state we were missing an opportunity in this regard. We are missing a huge opportunity because An Post sold off Ireland On Line, IOL, in 1999. Despite the fact that the latter had made a profit every year since it was purchased by An Post, which was two years after it was founded in 1992, An Post sold it to Esat Digifone at the encouragement of then Minister, Deputy Lowry. That is in the past, but it shows that decisions made then undermined the future viability of An Post, the consequences of which we are suffering. I believe it is now too late for An Post to start competing for Internet services, but it can make strategic links with the companies delivering these services.

Increasing the price of stamps, as is proposed in this legislation, in the absence of any other action, is pointless and could be severely damaging to the company. If this action was attached to a timetable for delivery of the recommendations outstanding from the Grant Thornton report and the Bobby Kerr report, I could understand it. While it is a first step it is only one step because we do not have a guarantee in terms of when the other changes which may help might come about. When I worked in Bord na Gaeilge, part of my job was to ensure the mail was franked every day and then delivered to the post office for sorting. As the cost of postage increased, an instruction was given by the board, which was a State company, to reduce postage expenditure by using courier services for the delivery of post in the city. People will be aware of the huge increase in the number of courier services in recent years. I am sure that as postage charges increase most small companies that are struggling will look again at whether they should continue to avail of the services of An Post to have their leaflets, fliers and so on delivered. This is one of the areas wherein there is still a lot of post. If there is an increase in the cost of postage for magazines, regular monthly newsletters - known in An Post as "flats" - calendars, Argos catalogues and so on, which we all receive in the post, the companies involved will weigh up whether it is worth doing business with the An Post. People will remember phone books. The decision to no longer deliver them resulted in a loss of business for An Post. As I said, a number of services will transfer to other providers. Some companies are already gearing up for competition with An Post in terms of delivery, including CityPOST. Thankfully, although regrettably for many people who did not get their parcels for Christmas, Parcel Motel has struggled to compete with the postal service. It is a pity people did not stick with the services provided by An Post. Had they done so, it might have put some extra money into the company's coffers.

As stated, I do not believe increasing postage charges will stem the dwindling mail loads. The most logical port of call would have been for the Minister to first bring the other alternatives before this House and, if they did not work, to then increase the postage charge. A post office in my own area closed before Christmas. I have heard what other Deputies had to say about the closure of rural post offices. The same is happening in many small villages in Dublin. It is the elderly people who cannot get a bus to the next nearest post office and who are obliged to walk to it who are struggling, although the advantage in Dublin is that the next nearest post office will be only a mile away in most cases. However, it is still very traumatic for people when their local postmaster or postmistress retires and somebody else gets the contract. There is no logic to this when it is economically viable for stores such as Centra to take on the service. Many of these stores are willing to take on the service, yet licences are being transferred to other post offices.

People will continue to write letters into the future, although, perhaps, on a less frequent basis. I recall that 20 years ago people were talking about the demise of the print media. Most people still prefer to read the newspapers or books in paper format. The same will apply in terms of cash. People will still want cash. There are many places in the world where one can purchase services via a mobile phone. An Post needs to get real, and very quickly, in terms of how society is changing. The Government must instruct An Post to fast-track its proposals around electronic funds transfer. Had it done so already, we would not be here taking the lazy option of increasing postage charges as a first measure.

I mentioned the timeframe for other measures. Perhaps the Minister of State, Deputy Kyne, will tell us the status of the other proposals and indicate when they will be brought before us and when they will be implemented, or if there is any difficulty around their implementation. I am not as familiar with what is happening in this regard as are Deputies who attended the committee yesterday. Perhaps there are practical reasons why these recommendations cannot be implemented. I cannot understand why in this day and age we are allowing a company like An Post to struggle in the context of the opportunities available in this area.

The cap introduced in 2011 was supposed to encourage An Post to make efficiencies and diversify. It has obviously failed to do this because we are here again seeking to increase the price of stamps without having taken all of the other steps proposed.

Part of the universal social charge obligation is the provision of a minimum service. It would be interesting if some community took a case in this regard because I presume part of the service is a post office. If the post office is not in existence, is An Post in breach of its universal service obligation? I remember Mr. Pat Cox saying way back how great the universal service obligation was in regard to telecommunications services because some rural area in Ireland took Telecom Eireann to task in Europe because the company had got rid of the telephone boxes, long before the mobile phones took over. The company was forced into not getting rid of them because their provision was part of the universal service obligation.

There is obviously a service obligation on An Post to deliver a minimum service. It is not just about the delivery of letters to one's door every single day. Years ago, there were two deliveries in this city every day, in addition to a delivery on a Saturday and a Sunday. People need to think about this. If An Post is going down the route of minimising and reducing the level of service, perhaps people could determine whether its doing so is contrary to the universal service obligation that the Government has signed it up to and enforced upon it. This obligation was a good idea, but at this stage An Post needs to live up to its commitment to the people.

I thank all the Deputies who contributed to the debate. A considerable number have contributed to the debate on this very important Bill and stayed throughout. The comments made are reflective of the high regard people have for An Post, the work it does, its workforce and its role in rural communities throughout the country and also urban communities, as pointed out by a number of Deputies.

A number of Deputies have expressed the view that they cannot support the Bill for a variety of reasons. Clearly, none is doing so with a wish to see An Post collapse or run out of money or to see workers not being paid or services withdrawn, but the consequence of not supporting what is effectively emergency legislation to ensure An Post can continue to pay its workers and perform its duties has to be acknowledged. As pointed out in my contribution and many others, the mails business is undergoing a profound structural change, both here and abroad. Electronic substitution has had a significant impact on the letters business. We have seen the downward trend which is expected to continue, particularly for large volume postal customers such as banks and utility providers. Clearly, there are opportunities in the parcel business, as pointed out by a number of Deputies.

I wish to comment on the role of the Department of Communications, Climate Action and Environment regarding An Post. The Department is responsible for the postal sector, including the governance of An Post, to ensure the company is fully compliant with the code of practice for the governance of State bodies and governance functions included in the statutory framework underpinning An Post. Following a Government decision earlier this year, responsibility for the post office network and the Kerr report and associated matters transferred to my colleagues in the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs.

Debate adjourned.
The Dáil adjourned at 10.15 p.m. until 12 noon on Thursday, 19 January 2017.