New Zealand: Where the Words 'Profit' and 'Postal Service' Belong in the Same Sentence
There must be some mistake. Our Postal Service announced in early August it is hemorrhaging at the rate of $14 billion this year. So disappointing.
On the same day, the New Zealand postal system announced its disappointing results. It will earn profits of only $72 million for 2010. Disappointing because they are down a few million from last year. Did you ever expect to see the words “profits” and “postal system” appear in the same sentence?
If this is not enough to capture your attention, let us do some conversions. The $72 million New Zealand dollars are equal to about $51 million U.S. dollars. And New Zealand’s population is only 4.3 million. Multiply by 72 to reach our population of 310 million.
Multiply the profit of the NZ postal system by 72. Yes, the system will make a profit this year equivalent to $3.7 billion. That is in U.S. dollars.
Wait. The pain intensifies. This is the expected after-tax profit. Last year their postal system paid the equivalent of $1.15 billion in taxes to the New Zealand government (calculated in U.S. dollars).
It also pays hundreds of millions in dividends to its only shareholder -- the New Zealand government. That is, the taxpayers.
In its August 5 announcement our postal service predicted it could go broke. It may run out of cash by next year. You may catch a whiff here of the service’s plan to hit up taxpayers for another fix.
Meanwhile, the New Zealand system projected its profits will rise. To $4.3 billion next year. And to over $6 billion the year after. (Calculated in U.S. dollars and multiplied by the population difference of 72.) And yes, mail volume is slowing there. Email is growing there too. Their system faces the same challenges ours does. The difference is that they are up for the challenges.
Our postal system has lost money in 14 of the last 16 quarters. Their postal system has made money every year for the last 22.
Guess which company was named New Zealand's most trusted retail brand for the fourth time in five years in a Reader's Digest survey?
Guess which postal service operates in full competition, with no monopoly protection? Certainly not ours. Theirs does. And by competition, I mean there are 25 individual postal carriers in New Zealand.