Dáil Éireann Debate, Tuesday - 21 March 2017
1111. Deputy Niamh Smyth asked the Minister for Communications, Climate Action and Environment his views on whether the increase to €1 in the price of a postage stamp will deter persons using stamps and further affect revenue at An Post; his further views on whether it will help revenue; and if he will make a statement on the matter. [13766/17]
View answer1129. Deputy Niamh Smyth asked the Minister for Communications, Climate Action and Environment if he will address the concerns of persons in counties Cavan and Monaghan that are of the view that the increase in the price of the postage stamp to €1 will be the death of sending the Christmas card and letters; and if he will make a statement on the matter. [13769/17]
View answerI propose to take Questions Nos. 1111 and 1129 together.
As the Deputy will be aware the Communications Regulation (Postal Services) Act 2016 recently passed through all stages in the Oireachtas and has now been signed into law by the President. The legislation provides for the repeal of the current price cap mechanism which will enable An Post to implement the proposed price increases.
The mails business is undergoing a profound structural change both here and internationally. Electronic substitution has had a significant impact on the letters business. 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 resulting in a serious financial impact for An Post. It should be noted that internationally the mails and post office businesses are experiencing long term structural challenges so this is not just an issue facing An Post.
One of the main elements of the postal service here in Ireland is the daily delivery of post to every address in the State. I am extremely cognisant of the value placed on this service by communities in both rural and urban areas and recognise the importance of ensuring that An Post has the capacity to continue to fulfil its obligations in this area. The introduction of legislation to effectively enable An Post to increase the price of the stamp was considered the most viable option for supporting An Post in the short term while a restructuring plan is developed and implemented. This is not a decision that 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 facing the company.
I too was concerned that this legislation would have the effect of accelerating the decline in mail volume and it is an issue I raised directly with An Post when the Bill was being drafted. Having evaluated the situation, An Post is satisfied pricing represents the best approach to secure the financial viability pending consideration of restructuring options. While volume decline is a feature of the postal markets both here and internationally, it is difficult to disaggregate the impact of pricing from other factors affecting postal volumes such as e-substitution. In terms of a suite of options to support the financial viability of national postal operators, pricing is playing a significant part in supporting the continuation of daily postal services.
