Politics, finance ‘limit Post Office services’

Press, 2 July 1979, Page 16

Politics, finance ‘limit Post Office services’

Post Office services can only be as good as financial considerations and the policies of successive Governments allow them to be, a retired Christchurch Regional Engineer of the Post Office said in a statement to “The Press.”

Mr H. W. Wilkinson, who retired in 1971, was replying to a leading article in “The Press” of June 27, “Post Office charges.” The article said that the Post Office should pay its way, but questioned whether it should be permitted to make a “handsome profit.” “The appearance that the Post Office is making a substantial profit is based on a misconception,” said Mr Wilkinson. ‘“There is a profit if the last year’s Post Office accounts are looked at in isolation. But if the operations of the Post Office are considered over several years quite a different picture emerges.

“A previous Government froze Post Office charges for several years. In that time the Post Office did not make a profit and it was prevented from expanding its services because of the shortage of money. The Post Office today is trying to catch up on the delays in development imposed on it several years ago.” Even the current profit was not as big as it appeared to be, said Mr Wilkinson. “Because of antiquated systems of pay adjustments substantial pro-

vision has to be made for back payment of wage and salary increases," he said. “When pay questions are finally settled later this year back pay will have to come out of profits.”

Mr Wilkinson said there were wide misconceptions about the operations of the Post Office which was a trading concern and had to operate like any other business.

“When a figure appears in the Estimates for the Post Office that is a statement of what the Post Office is going to be allowed to spend on telecommunications extensions or whatever; but the Post Office still has to raise the money. If it borrows from the Government, from the Consolidated Account, it has to repay the money with substantial interest. The money is not a gift,” he said.

“When the Post Office collects licence fees for television sets it does not keep the money, as was implied recently in a report from Auckland. The Post Office acts as the agent of the Broadcasting Corporation. The corporation gets the licence fees except for a very small charge to cover the cost of collection.”

The leading article stated that people who used telephones at busy times would know that the overloading signal was heard frequently in some exchange areas. “That is true,” said Mr Wilkinson. “But the grade

of service as I knew it some years ago was that no more than one call in 500 would be lost. I doubt that this standard has been lowered. To maintain that standard requires a certain quantity of switching equipment in each exchange and a certain quantity of equipment to link exchanges. “If the Post Office does not have the money to spend to provide the equipment, or is not allowed by the Government of the day to borrow the money, then the service must deteriorate."

The leading article had stated that Post Offices in many countries paid their way. “Comparisons are not necessarily appropriate,” said Mr Wilkinson. “Systems are different in other countries.

“For instance, the Post Office in New Zealand decided many years ago to create wide calling zones where local telephone calls would be free. In Australia and Britain, a charge is made for each local call as well as distant calls. “When local calls are free people make more of them and more equipment has to be provided. Other countries find they can provide the same service with less equipment; they charge for local calls and people hesitate before using the telephone,” said Mr Wilkinson. Changes in Government policy affected the level of service the Post Office could provide, perhaps years into the future. “If the Post Office wants to provide new or better service it can’t simply take equipment off a shelf,” said Mr Wilkinson. “Detailed engineering is required to integrate new equipment with that in use. Sometimes new buildings are required and land has to be bought.” As an example, Mr Wilkinson said planning for the new Burwood exchange, which came into service in Christchurch earlier this year, had begun before he retired more than seven years ago. “In all, you can say that Post Office services are only as good as they are allowed to be by financial considerations and Government policies. By freezing charges for Post Office services one recent Government effectively stopped development for some years,” said Mr Wilkinson.