Australia Post
Part of Tomorrow
Annual Report 2016

2016 performance highlights
Our business performance
$36 million Profit after tax
•	Joint venture with Aramex 
•	Qantas airfreight network
•	Majority investment in Mailplus
Our innovation and expertise
Australia Post Accelerator: $20 million investment
Government innovation partnership: digitising WA Police National Police Check process
Our customers and communities
Community Service Obligation
Exceeded our 94% on time target in delivering letters, with a result of 96.2%
Community Investment
$7.05 million
Our people
Gender pay gap
1.4%
Safety
6.6 LTIFR
Our customer network
3.8 million MyPost registrations
11 new superstores
249 million annual customer visits
Our environment
Reduced carbon emissions by 17% since the year 2000
We’re on track to achieve our target of 25% by 2020
Our purpose and values
Australia Post’s purpose is: Helping our people, customers and communities deliver a better future. Everyone, everywhere, everyday.
Our strategy is informed by, and focused on, services that meet customers’ contemporary needs. We love delivering eCommerce through our people by embracing our shared values:
Improving everyday: A better tomorrow starts with the changes we make today.
Being safe everywhere: There’s nothing more important than our safety, health and wellbeing.
Respecting everyone: We care about people and value diversity.
Delighting our customers: A great customer experience creates a better future.
Helping each other: We’re at our best when we work together.

Your Australia Post
Australia Post has a rich history dating back to 1809 when a former convict, Isaac Nichols, was appointed to the role of Postmaster for New South Wales – using his own home to sort mail that was collected from sailing ships arriving in Sydney Harbour. The first Post Office, opened by Nichols soon after, was in George Street, Sydney. 
In 2008, after 200 years of growth, Australian letter volumes reached an all-time peak. In the eight years since, addressed letter volumes have declined by 43 per cent per letterbox. 
This shows how rapidly our traditional core business has shifted due to the emergence of digital communication and transactions. 
The internet, while devastating for our letters service, has created new opportunities for eCommerce, which requires parcel delivery and secure online transaction capability. As a result, we have moved from operating a monopoly – the domestic letters business – to competing in the global parcels and trusted eCommerce solutions markets.
Headquartered in Melbourne, Australian Postal Corporation largely operates in Australia, with offices across the country. The Australia Post Group is one of the most trusted brands in Australia, employing more than 36,000 people across our integrated delivery, logistics, retail and eCommerce network. 
A self-funded government business enterprise, Australia Post has the Australian Government as its sole shareholder. The corporation does not receive any taxpayer funding and pays dividends to the Australian Government – more than $1.7 billion over the past decade.
As required under the Australian Postal Corporation Act 1989, we continue to balance our commercial objectives with delivering our community service obligations. Any profit we earn is either used to pay a dividend to our shareholder or is reinvested in our assets and services so that we are equipped to meet the changing needs of our customers and the community.

About this report
This is the sixth year that we have incorporated sustainability reporting in our annual report. Prepared in accordance with legislative requirements, the Global Reporting Initiative (GRI) G4 Guidelines, Integrated Reporting <IR> and the principles set out in the United Nations Global Compact, our annual report includes our financial, social and environmental activities each year.
Integrated reporting is aimed at facilitating integrated thinking into mainstream business practices. It is more forward-looking than traditional annual reporting, while not as specifically detailed as comprehensive sustainability reports. In actively considering the relationships between our enterprise and how we create value in our areas of impact – organised as ‘capitals’ – we can move towards publicly reporting the way we integrate our thinking and decision-making. 
The International Integrated Reporting <IR> Council Framework provides guiding principles that align with the GRI, the well-established global best practice sustainability framework. The content of this report has been guided by the annual report Steering Committee. The approach was endorsed by the Executive General Manager, Group Services, with final approval of the annual report by the Board.
This year our annual report is framed around the six integrated reporting capitals to align with the <IR> Framework:
Our six integrated reporting capitals
•	Our businessperformance
Financial Capital
•	Our customers 
Our communities 
Social Capital
•	Our customer network
Physical Capital
•	Our innovation
Our expertise
Intellectual Capital
•	Our people
Human Capital
•	Our environment
Natural Capital
Determining what matters most – the materiality process
This report provides information for our four primary stakeholders:
•	our shareholder (the Australian Government)
•	our people
•	our customers
•	the broader community. 
The information in this report applies to Australia Post within the reporting period, unless otherwise stated. Australia Post did not issue restatements of information provided in previous reports and there are no significant changes in the boundary or scope of this report in 2015/16.
To determine the content and ensure we are reporting on what matters most to our stakeholders, we conduct an annual materiality assessment. This process is explained on page 60. 
The material sustainability issues nominated by our internal and external stakeholders are:
Top 10 material issues 2016 
1. 	Customer experience
2.	Community relations
3.	Innovate/co-create
4.	Operating profitability 
5.	Transparency and disclosure
6.	eCommerce expertise 
7.	Support for the vulnerable 
8.	Digital access
9.	Greenhouse gas emissions
10.	Fair labour practices

Contents
Your Australia Post	4
About this report	5
Our strategy and focus	8
Chairman and Managing Director & Group CEO’s messages	10–13
Our business performance	18
Our customers 
Our communities	24
Our customer network	35
Our innovation 
Our expertise	40
Our people	45
Our environment	54
Materiality review	60
UN Sustainable Development Goals	62
Assurance statement	63
Corporate Governance Statement 2016	64

Our strategy and focus
As the world changes through the growth of digital technology, the way we live, learn and work has transformed. In looking to the long-term sustainability of our business, our future clearly depends on reshaping our business and continuing to create leading customer solutions.
Satisfying our customers and anticipating what people need and expect from Australia Post will ensure that our business continues to grow and remain relevant and “Part of Tomorrow”. 
Our purpose is to help our people, customers and communities to deliver a better future. We know we achieve this most effectively when we have happy and engaged people working to design and deliver innovative solutions.
We’ve worked hard to reform our letters services and to keep pace with everyone’s increasingly digital lives and the outlook is for an increase in social, mobile and online transformation. Our future, alongside our customers, is a story of growth and opportunity. 
For our business, digital disruption means:
•	a decline in letter volumes but, at the same time, an increase in online shopping that is powering the growth of parcel deliveries 
•	the opportunity to build eCommerce partnerships to help our customers buy and sell online, both in Australia and internationally 
•	maintaining our track record as a trusted service provider and responding to customer needs for identity, verification, banking, passport and payment services.
Delivering eCommerce experiences customers love
•	Consumer
Making online shopping and services easy
•	Small Business
Going and growing online
•	Business
Powering eCommerce
•	Corporations and Government
Powering digitisation
•	Parcels/Letters
Delivering market leading sender and receiver experiences for all our customers
•	Trusted Solutions
Reinventing services to meet customer needs
•	Sustainable Post Office and Delivery Network
•	Innovate and grow the business
How we create value
Australia Post’s operations and our Part of Tomorrow strategy, in particular, create value for our customers and diverse stakeholders by drawing on all the six capitals outlined on page 5 and discussed throughout this report. Ultimately, being proudly Australian owned, we contribute to Australia’s economic growth and reinvest into the community to advance our enterprise purpose: Helping our people, customers, and communities deliver a better future.
At a top-line, we create value through:
•	Our business performance: Contributing to Australia’s economic growth and prosperity
•	Our customers, Our communities: Being a trusted and reliable partner for our stakeholders
•	Our innovation: An agile and competitive organisation that meets the needs and expectations of customers
•	Our customer network: A modern and competitive network delivers quality service to our customers
•	Our environment: Reducing the environmental footprint of our operations
•	Our people: Working with over 50,000 employees, licensees and contractors nationally, empowering a skilled, diverse and engaged workforce. 
Being true to purpose
Our Part of Tomorrow strategy outlines how we advance our purpose, act and grow to deliver eCommerce experiences that customers value, differentiate ourselves from competitors, and make customers our greatest advocates. We know that global megatrends are impacting our operating environment: globalisation, digitisation, changing customer behaviours, changing expectations of the community and employees, and the effects of climate change to list a few. 
Increasingly, our value is founded on creating eCommerce solutions that meet the varying needs of customers. But we recognise the importance of measuring and monitoring our impacts in more than financial terms and of our role in creating social and environmental value. That’s why, in 2016, we refreshed our approach to Corporate Responsibility and launched our new strategy, “Everyone, Everywhere, Everyday”. Our approach is inspired by the notion of Creating Shared Value.
“Everyone, Everywhere, Everyday” is all about being true to our enterprise purpose, and bringing it to life. It is Australia Post’s roadmap to increase social and economic inclusion and wellbeing by connecting all Australians physically and digitally, to minimise our environmental impact throughout our value chain and to transform our own organisation so we meet the changing expectations of our customers and communities and help them prosper in a digital world.

Chairman’s message
We implemented important reforms to the letters service in 2015/16, while continuing the transformation of Australia Post into a customer-led eCommerce company.
Reforming the letters service
With the Australian community continuing to shift to using digital channels for communicating and transacting, the amount of addressed letters posted this year was down 9.7 per cent on the previous year. 
This means that the volume of letters sent in Australia, annually, is now 43 per cent below our all-time “peak-mail” year, back in 2007/08.
Given this rapid rate of digital disruption, one of our primary responsibilities involves managing the decline of letters carefully, while maintaining reliable, community-wide access to our services. To this end, we reached a landmark moment with the introduction of letter service reforms at the mid-point of this financial year. 
I would like to acknowledge the Federal Government for supporting the regulatory changes that were required to implement these vital reforms. 
The importance of those reforms to the long-term sustainability of our services cannot be under-estimated. 
In the short-term, letters reform was an important factor in our return to profitability this financial year. But, the reforms also give us the ability to maintain our nationwide services; the freedom to implement ongoing operational change; and the resources required to invest in our future as an eCommerce delivery company.
Creating a customer-led culture
As a service-based company that earns all of its profit from operating in fully competitive markets, our entire business is mobilising to put customers at the centre of everything we do. This was a particularly prominent theme in the second half of this year, as we established the role of a Chief Customer Officer with the responsibility of advocating for the customer, creating customer-led services and instilling a more customer-centric culture at Australia Post.
As we seek to cement our position as Australia’s leading provider of eCommerce deliveries and services, our strategic initiatives are now all focused on supporting the specific needs of our customer segments. That involves creating safe and easy online shopping experiences for consumers; helping small business to go online and grow; powering eCommerce for all businesses; and helping corporations and government to digitise to improve their customer service.
Delivering eCommerce
We continued to adapt our networks, develop new capabilities and offer new services to support the growth of online shopping and eCommerce.
In June, we announced a strategic alliance with the global express delivery and logistics company, Aramex. We expect that this alliance will develop into a global business partnership that enables us to offer seamless cross-border logistics and delivery support for Australian businesses and consumers.
Thank you
Finally, I’d like to acknowledge the tremendous contribution made by my fellow directors, our CEO Ahmed Fahour, the management team, our employees, licensees and contractors. It’s a pleasure to lead this motivated, nationwide team, because they are so committed to delighting our customers – everyone, everywhere and everyday. 
John Stanhope AM
Chairman

Managing Director & Group CEO’s message
This was an important turn-around year at Australia Post, as we reformed the letters service, continued to build our eCommerce offering for our customers – and returned to profit.
Our 2015/16 performance
This time last year, it was my grim duty to report that Australia Post had recorded its first full-year loss in more than 30 years. Therefore, I am delighted to report that the Australia Post Group returned to the black in 2015/16 – earning a modest profit before tax of $41 million.
Total Group-wide revenue for the year was $6.56 billion (up 3.0 per cent on last year). The improvement in our financial position in 2015/16 was achieved on the back of two key factors: (1) the reform of the letters service and (2) growth in our business-to-consumer parcel deliveries.
Our commitment to maintaining accessible and reliable services, nationwide, is evident in that we again met, or exceeded, all of the performance standards related to our community service obligations. Most significantly, we maintained 4,392 Post Offices across Australia (against a target of 4,000 access points) and we delivered 96.2 per cent of letters on time or early (well ahead of our 94 per cent target).
Another pleasing aspect of this year’s performance was that we reduced our lost-time injury frequency rate (LTIFR) to 6.6, which equals our previous record low for the incidence of injuries in our workplaces. The reduction in injuries (our LTIFR is down 43 per cent over the past four years), is the result of our sustained focus on safety culture at all levels of the business.
Letters reform package
The ongoing and accelerating decline in the community’s use of letters meant that we had to reform the service to ensure it remained sustainable – and to prevent it from undermining the financial viability of the whole Group. 
We responded to this significant challenge by consulting widely with our many stakeholders and, then, we implemented a carefully crafted package of reforms on 4 January 2016. 
The reforms include the introduction of a two-speed letters service for consumers and an increase to the basic postage rate. But the broader reform package also involves discounted 60-cent stamps for the 5.7 million Australians with a concession card; commitments to maintain 4,000-plus Post Offices and five-day-a-week delivery; as well as job transition opportunities for our people, with no forced redundancies for anyone affected by the operational changes associated with letters service reforms. 
With these reforms in place, it means by next year we will have boosted total annual payments to licensed Post Office operators by $125 million in the space of four years.
Enabling eCommerce for our customers and the community
For a number of years now, Australia Post has been transforming into a parcel delivery and trusted service provider that enables all Australians to participate in eCommerce. 
That transition continued this year, as we expanded the capacity of our major parcel facilities and developed new solutions that make it easier for businesses to lodge with us – and for consumers to control final delivery. 
We also established a new business unit this year, called Trusted eCommerce Solutions, which is partnering with government agencies and corporations to co-create solutions for the secure, omni-channel delivery of services.
There are now 4.1 million Australians registered on the MyPost platform. We added important new functionality to MyPost this year, including the ability for parcel recipients to direct us to “safe drop” their deliveries. 
Thank you
The operational, cultural and service changes that we implemented this year will prove to be vital in setting up this great brand to be part of tomorrow.
Those changes have involved a genuine commitment from everyone in our business – from my fellow directors and the senior executive team, through to our operational and customer-facing staff. I’d like to thank you all, and commend you on an incredible team effort. 
Ahmed Fahour 
Managing Director & Group CEO

Our Board and leadership team
John Stanhope AM
BCom (Economics and Accounting), 
FCPA, FCA, FAICD, FAIM, FAHRI
Chairman (non-executive)
John Stanhope was appointed chairman of Australia Post in November 2012 (current term expires in November 2019), and has extensive experience in finance, treasury, risk management and assurance, investor relations and corporate security and investigations. Mr Stanhope is currently chairman of the Melbourne International Jazz Festival and the Bionics Institute, a director of AGL Energy Limited and Our Neighbourhood and Chancellor of Deakin University. He was previously chief financial officer and group managing director, finance of Telstra and an executive director of Telstra.
Ahmed Fahour
BEcon (Hons), MBA, FAICD
Managing Director & Group CEO
Ahmed Fahour was appointed managing director and group chief executive officer of Australia Post in February 2010. He has held a number of senior executive positions within the finance and banking industries in Australia and overseas and was previously CEO of Citigroup (Australia and New Zealand) and National Australia Bank (Australia) and is the former chairman of Rip Curl Group. Mr Fahour is currently chairman of LaunchVic, Pro-Pac Packaging and Our Neighbourhood.
Brendan Fleiter
LLB, B Juris MAICD
Deputy Chairman (non-executive)
Brendan Fleiter has been a member of the Australia Post board since October 2011, and was appointed deputy chairman in May 2013 (current term expires May 2017). 
Mr Fleiter is a former CEO of Crazy John’s Group and is a qualified lawyer with extensive retail and telecommunications business experience. Mr Fleiter is currently the chairman of Kennards Hire and Walnut Melbourne, deputy chair of Methodist Ladies’ College and chair of its Foundation and is a director of Volleyball Victoria, Our Neighbourhood, Australian Food Allergy Foundation, Godfreys Group and Interactive.
Dominique Fisher
BA (Hons), MAICD
Director (non-executive)
Dominique Fisher was appointed to the Australia Post board in November 2014 (current term expires in November 2017), and has extensive business experience in the corporate area, including the commercialisation of new technologies. Ms Fisher is principal of EC Strategies, executive chairman of CareerLounge Pty Ltd and a non-executive director of LaunchVic. She has previously served as a director of Pacific Brands, Insurance Australia Group, NRMA, Opera House Trust and Prostate Cancer Foundation, as well as chairman of Sky Technologies and Circadian Technologies.
Michael Byrne
MSc, MAICD
Director (non-executive)
Michael Byrne was appointed to the Australia Post board in October 2015 (current term expires in October 2018). Mr Byrne has extensive chief executive experience both in Australia and internationally, including in the areas of logistics and supply chains. He is the former CEO of Coates Hire, Linfox Australia and its Asian Subsidiaries and Westgate Holdings. Mr Byrne is also a foundation and current member of the Institute for Supply Chain and Logistics, Industry Advisory Board of Victoria University, and was previously a director of BevChain, Westgate Holdings and OzHarvest.
Holly Kramer
BA, MBA | Director (non-executive)
Holly Kramer was appointed to the Australia Post board in October 2015 (current term expires in October 2018). Ms Kramer has more than 20 years’ experience in general management, marketing and sales for customer-focused organisations. Most recently she was CEO of apparel retailer Best & Less. Holly has also held senior executive and marketing roles with Pacific Brands, Telstra, eCorp and the Ford Motor Company. Ms Kramer is currently a director of Woolworths, AMP Limited, Nine Entertainment, Southern Phones, and the Alannah & Madeline Foundation. 
Bruce McIver 
FAICD | Director (non-executive)
Bruce McIver was appointed to the Australia Post board in December 2015 (current term expires in December 2018). Mr McIver has strong business experience with expertise in transport and logistics in Australia and across the Asia Pacific region. He was most recently the president of the Liberal National Party of Queensland and was also a foundation director of the Australian Trucking Association and chairman of the Board of Asia Pacific Shipping Enterprises.
The Hon. Michael Ronaldson
LLB | Director (non-executive)
Michael Ronaldson was appointed to the Australia Post board in May 2016 (current term expires in May 2019) and is a former member of the Australian Parliament, representing the Liberal Party. Mr Ronaldson was a Senator for the state of Victoria from July 2005 to February 2016, and previously served in the House of Representatives as the member for Ballarat from 1990 to 2001. He served as the Minister for Veterans’ Affairs, the Minister Assisting the Prime Minister for the Centenary of ANZAC, and the Special Minister of State. He was previously a director of Snowy Hydro Ltd and Berklee Pty Ltd, and was the CEO/Founder of Madison Public Affairs.
Jan West AM
BCom, FCA, GAICD | Director (non-executive)
Jan West was appointed to the Australia Post board in May 2016 (current term expires in May 2019) and has a very strong background in finance and audit across Australian and international listed and private companies, government agencies and community organisations. Mrs West is currently a director of Australian Red Cross, Dairy Australia, Neurosciences Victoria and Melbourne Forum. She has been president of the Institute of Chartered Accountants, a member of the Financial Reporting Council and a non-executive director of a number of commercial and not-for-profit entities, as well as being an audit partner of Deloitte.
Retirements
Susan Bitter
BEc (Hons), Dip App Fin&Inv, FICA, MAICD
Director (non-executive)
Susan Bitter was appointed to the Australia Post board in August 2012 and retired in August 2015.
Peter Carne
BA, LLB, FAICD, FAIM
Director (non-executive)
Peter Carne was appointed to the Australia Post board in December 2009 and retired in December 2015.
Michael D’Ascenzo AO
BEc, LLB, CA, FAICD, Hon. Life Member of CPA, Hon. FATMA
Director (non-executive)
Michael D’Ascenzo was appointed to the Australia Post board in May 2013 and retired in May 2016.
Talal Yassine OAM 
BA, LLB, LLM, MBA, Hon. Professorial Fellow (ANU), 
Adjunct Professor (UWS) 
Director (non-executive) 
Talal Yassine was appointed to the Australia Post board in August 2012 and retired in August 2015.
Our Executive Committee
Bob Black
Executive General Manager, Parcel & eCommerce Services
Christine Corbett
Chief Customer Officer
Peter Bass
Executive General Manager, Letters and Mail Network
Laz Cotsios
Group Executive Business Services
Ahmed Fahour
Managing Director & Group CEO
Janelle Hopkins 
Executive General Manager, Finance & Group CFO
Paul Burke 
Group Executive, Government Affairs & Corporate Secretariat
Greg Sutherland 
Chief Innovation Officer
Chris Blake 
Executive General Manager, Group Services
Andrew Walduck 
Executive General Manager, Trusted eCommerce Solutions

Our business performance
As a government business enterprise, we are a self-funded commercial company that is focused on delivering services to communities all over Australia. With the global shift to digitisation, it has been clear for a number of years that we needed to plan a very different future for Australia Post, to ensure the survival of our iconic institution. 
We needed to carefully manage the community’s declining use of the letters service while simultaneously building new services for the digital economy, leveraging our trusted brand and nationwide community networks. 
The value we create incorporates how we manage the impact of change on many individuals’ lives right across Australia. As we continue to power eCommerce growth by creating cross-border networks and markets, we also continue to prioritise support for our community.
A changing business landscape
Addressed letter volumes have declined by 43 per cent per letter box since 2008. During this period, letters have gone from being a lead indicator of Australia’s economic growth, to being a lead indicator of digital disruption. As a result, Australia Post has been delivering a shrinking volume of letters to an ever-expanding network of addresses. 
This was an unsustainable situation, as evidenced by the $1.3 billion of losses that we have incurred in our letters business over the past eight years.
During 2015/16, a number of reforms were required to address declining letter volumes and to ensure we are part of tomorrow’s world. Our financial position is stronger as a result of these reforms. 
The solid performance of both our parcels services and trusted eCommerce solutions businesses is evidence of the opportunity to create new revenue streams for our business. We already provided passport applications, identity checks, banking, information management and payment services through our network. Working with our corporate and government customers we are increasingly co-designing solutions around their policy and business outcomes, drawing from our demonstrated capabilities. The Western Australia Police electronic National Police Check, which won a government innovation award in 2015/16, is an example of the strength of our new value proposition (see page 42 for details).
Cumulative volume loss in addressed letters, per letterbox
This chart shows the volume loss in addressed letters grow year-on-year since 2012 (21%), reaching 43% in 2016. 
Financial performance
We recorded a profit before tax of $41.0 million in 2015/16, following a loss the previous year. Our return to profit was largely driven by the reform of our letters services, which reduced the magnitude of the loss that we incurred in the delivery of traditional mail services. 
The main drivers of the profit result were the continued solid performance of our parcels business, investment in online partnerships and further development of our portfolio of Australia Post trusted eCommerce solutions. 
Our total cash investment across strategic projects and asset replacement and acquisitions was $298.1 million. Looking to our future, as we adopt a portfolio approach to investments centred around capability, we will tailor our investments to future capacity.
Addressing our risks
Australia Post has a Group Risk Management Framework (GRMF) in place that describes the core components that support the business to effectively manage risk. The GRMF has been developed in consideration of the size, scale and scope of the Australia Post Group and includes the establishment of core risk categories that are currently considered material to the Group. These core risk categories are: Strategic; Governance; Financial; Market; Third Party; Environmental; Corporate Social Responsibility; Regulatory and Operational (including. cyber and industrial relations).
A key component of the GRMF includes the Board Risk Appetite Statement that is aligned to the core risk categories and describes the principles relating to the level of risk that Australia Post is prepared to seek, accept or tolerate in pursuit of our objectives.
Five-year trends
	2012	2013	2014	2015	2016	
Mail volumes (m)	 4,843.0 	 4,580.2 	4570.2	 4,314.2 	 4,023.5 	
Revenue ($m)	 5,126.2 	 5,893.2 	 6,383.3 	 6,373.8 	 6,562.2 	
Profit/(loss) before Tax ($m)2	 366.7 	 210.7 	 103.0 	 (352.1)	 41.0 	
Profit/(loss) after Tax ($m)2	 281.2 	 177.4 	 116.2 	 (221.7)	 36.4 	
Profit/(loss) from reserved services2 ($m)	 (114.4)	 (198.0)	 (242.6)	(284.3)	 (14.3)	
Profit/(loss) from regulated mail services2 ($m)	(186.9)	(280.3)	(303.7)	(407.1)	(114.4)	
Return on equity (%)1, 2 	 16.8 	 10.5 	 6.7 	 (14.9)	 2.3 	
Return on average operating assets (%)2	 11.5 	 6.2 	 3.4 	 (8.2)	 1.8 	
Debt to debt plus equity	 29.1 	 27.3 	 28.8 	 27.2 	 27.8 	
Dividends declared ($m)	 213.7 	 192.7 	 78.8 	 – 	 20.0 	
Interest cover (times)2	 10.8 	 7.7 	 3.6 	 (10.2)	 2.2 	
Capital expenditure ($m)	227.0	386.8	523.1	342.0	298.1	
1 Return on equity is calculated as Profit/(loss) after tax as a percentage of equity. Equity has been adjusted to remove the impact of the Group’s net superannuation liability/asset.
2 Changes to AASB 119 Employee Benefits took effect on 1 July 2013. 2013 has been restated for like-for-like comparison. Years prior to 2013 have not been adjusted to reflect the changes as a result of this change in accounting standard.
Revenue
		2012	2013	2014	2015	2016	
$(M)		5,126.2	5,893.2	6,383.3	6,373.8	6,562.2	
This chart shows that revenue increased steadily year-on-year from 2012 to 2014, when it reached $6,383.3M before dropping slightly in 2015 then improving to 6,562.2 in 2016.
Profit/(loss) before tax
		2012	2013	2014	2015	2016	
$(M)		366.7	210.7	103.0	(352.1)	41.0	
This chart shows that Australia Post returned a profit before tax every year between 2012 and 2014. However, the chart also shows that profit before tax had been declining every year since 2012, before posting a loss before tax of $352.1M in 2015. 2016 saw a return to profit of $41M. 
Profit/(loss) after tax
		2012	2013	2014	2015	2016	
$(M)		281.2	177.4	116.2	(221.7)	36.4	
This chart shows that Australia Post returned a profit after tax every year between 2012 and 2014. However, the chart also shows that profit after tax had been declining every year since 2012, before posting a loss after tax of $221.7M in 2015. The profit after tax in 2016 was $36.4.
Dividends declared
		2012	2013	2014	2015	2016	
$(M)		213.7	192.7	78.8	-	20.0	
This chart shows that Australia Post declared a dividend every year between 2012 and 2014. However, the chart also shows that the dividend declared had declined every year since 2012, with no dividend declared in 2015. In 2016 the chart shows a $20M dividend declared. 
Capital expenditure (cash)
		2012	2013	2014	2015	2016	
$(M)		227.0	386.8	523.1	342.0	298.1	
This chart shows that capital expenditure between 2012 and 2015 peaked in 2014, with a total cash expenditure reaching $523.1M before declining in 2015, then further declining in 2016 to $298.1M 
Shareholder return on equity
		2012	2013	2014	2015	2016	
%		16.8	10.5	6.7	-14.9	2.3	
This chart shows that Shareholder return on equity between 2012 and 2015 peaked at 16.8 per cent in 2012. From 2012, the return on equity has declined every year, with 2015 showing no return on equity. In 2016 the chart shows a 2.3 per cent return.
A partnership to build future success 
In May 2016, we partnered with Qantas to provide an exclusive domestic air-freighter network for Australia Post and StarTrack customers. The partnership further strengthened our position as Australia’s leading parcels and logistics provider and reinforced our mail delivery network. It builds on the strong relationship that has existed between the national carrier and the nation’s postal service since 1922, when Qantas first started flying airmail.
The new network, servicing nine destinations across the east and west coast of Australia, consists of six dedicated freighter aircraft featuring StarTrack branding, as well as continued priority access to cargo space in the Qantas Group’s passenger fleet. Our partnership with Qantas creates a greater opportunity for Australia Post to be first to deliver for our customers, combining our unrivalled delivery network and existing freight network with a dedicated and flexible air network.
It means we now have a dedicated air-freighter network that enables us to support local manufacturers, wholesalers, retailers and eCommerce companies as they grow their business – both in Australia and overseas.
Trusted eCommerce solutions
Australia Post’s trusted reputation and nationwide Post Office network have always underpinned our track record as a provider of face-to-face identity and verification services. In October 2015, we established a new business unit, Trusted eCommerce Solutions, which focuses on connecting citizens to business and government by powering digitisation and co-designing omni-channel solutions that are accessible to Australians across all abilities, ages, socio-economic groups and regions. 
During its first nine months, this business unit established its priorities and continued the momentum with our capabilities in banking, bill payments and payment processing, through successful products such as Bank@Post – now used by Australia’s four major institutions.
A key focus for this area of our business is co-designing solutions with government.
We partner with a range of government departments and agencies to support their policy outcomes in a way that makes it easier for citizens to access government services and opens up new opportunities for small and medium businesses to innovate and compete.
Government services
We have strengthened our focus on helping government departments and agencies deliver sustainable change across the core of their operations – providing the platforms, digital solutions and real-world help that organisations need to drive transformation. 
To meet growing consumer demand for choice and convenience in accessing services, we have made substantial investments in growing our digital identity, payment, information management and back-office processing capability:
•	enabling improved, inclusive access to government services via multiple channels
•	making it easier for governments to connect with citizens with greater time and cost efficiency
•	helping to digitise government services and deliver end-to-end solutions at scale through integrated physical and digital service models.
Parcels
The online retail market continued to drive revenue in our parcels business. Operating in a fiercely competitive market, our products and services performed well, using innovation and our unrivalled physical network to advantage. 
During the year, we increased the number of small parcels delivered by our posties and trialled new ideas including expanded delivery hours. This follows a $2 billion investment over the past four years, which included expanding our Melbourne and Sydney parcel facilities (see page 36 for details).
Mail services
We were pleased to once again exceed the on-time delivery standard set out under our Community Service Obligations, by delivering 96.2 per cent of letters on time or early (against the 94 per cent standard). 
In January 2016, we made some key reforms to our business to reduce losses and better manage the costs associated with declining letter volumes. This included introducing the choice of Regular or Priority delivery for consumers. By introducing this two-speed delivery service, we effectively aligned our consumer letters service with the options introduced for business customers in June 2014. We also increased the Basic Postage Rate (BPR) from 70 cents to $1, which applied to the Regular service, to better reflect the actual cost of sending a letter. We’ve worked hard to maintain our service standards and performance and we continue to provide mail delivery five days a week across our network. 
The reforms to the letters service were carefully crafted to minimise the impact on our community. As such, we maintained the price of the concession stamp at 60 cents and the seasonal greeting card price was frozen at 65 cents. Taken together, concession and seasonal greeting mail comprise around one-third of all the letters posted by consumers in Australia. 
Total addressed letter volumes declined by 9.7 per cent compared to the previous year. The overall result reflects the continued trend towards alternative digital technology. 
While the letters business again returned a negative result, the reform changes including the BPR increase helped reduce the loss and improve the sustainability of our letters service.
Our collaborative future
We continued building our eCommerce partnerships this year to help our customers buy and sell online and position them to meet prospective overseas customer demand – both in Australia and internationally. We believe one of our biggest growth opportunities involves supporting the growth of cross-border eCommerce by improving the integration between our domestic networks and services – and those of our global logistics partners. 
To prepare for the unfolding future, we joined Asian eCommerce giants JD.com and Alibaba on some of their most popular online shopping platforms, including 1688.com and Tmall.com. Our presence on these Chinese marketplaces is giving Australian businesses direct access to the booming Chinese consumer market. 
Through our joint venture with China Post (Sai Cheng Logistics International), we also offer logistics support to Australian companies doing business in China with end-to-end supply chain solutions. 
In June 2016, we took this another step further by announcing a strategic eCommerce alliance with leading global provider of comprehensive logistics and transport solutions Aramex. The proposed joint venture will build on the service capability of StarTrack International, with Aramex investing in StarTrack International and contributing marketing and sales capability. 
Under the terms of the agreement, Australia Post will provide last mile delivery in Australia for volumes generated by the joint venture, while we have extended the capabilities of StarTrack Courier by acquiring MailCall Courier from Aramex. This alliance helps us to compete domestically, while also positioning our business to capture more offshore parcel volumes to meet our customers’ growth projections.
Our future outlook
Through our positive financial performance we want to grow our business to create great experiences for our customers.
We work in a highly competitive industry so we are focusing on operational excellence to improve our cost to serve. 
With a continued focus on cost control, we embrace this competitive market, with an emphasis on efficiency and providing great value for customers.

Our customers 
Our communities
At the core of our customer’s expectations is that we will provide choice and convenience. The value we create for our customers, who are now globally connected, is in being consistent and reliable as we meet that expectation.
We live in an age where the power has firmly shifted from organisations to consumers. Our newly established Chief Customer Office has a clear mandate for creating the experiences that customers love and advocating for our customers across the enterprise. 
The new structure is all about putting the customer at the centre of everything we do. Empowering our people to solve customer problems will drive innovation and simplicity in the way we interact with customers. We have sharpened our focus on listening to customers and taking action, knowing our customers and understanding their needs.
As the advocate for the customer, our people are empowered to make demonstrable improvements in the customer experience. This includes removing the “pain points” for customers and bringing consistency to what our customers experience at our post offices, contact centre and our digital channels.
We are also looking to make a step change in the parcel delivery experience, to put the choice and control in customers’ hands to increase first-time delivery. With our personalised MyPost experience if you’re not going to be home you can elect to have your parcel “safe dropped” by instructing us where to leave it, redirect it to another address or take advantage of a free 24/7 parcel locker.
We recognise these as bold ambitions and big aspirations, but we believe we have a unique opportunity to redefine the customer experience.
As an organisation we want to be known for:
•	creating seamless customer experiences
•	listening to customers and taking action
•	knowing our customers
•	empowering our people.
Receiving letters: 17m monthly
Digital visits: 182m annually
App downloads: 1.9m annually
Visiting retail: 249m annually
Measuring customer advocacy 
We are committed to listening to our customers, to understanding their concerns or problems and developing solutions that address their needs and the future outlook.
One of the ways we track our customers’ experience is by measuring customer advocacy. The Net Promoter Score (NPS) provides data about what we are doing well and where we need to improve. Our NPS has dipped very slightly, from our 2014/15 result of +15. However, our 2015/16 result of +14.1 has seen minimal impact given the major reform to our letters service1. 
While reform to our letters service has had an impact, our research shows that the more people use our services, the more likely they are to advocate on our behalf. Promoters of Australia Post are important to us because they have the power to influence the purchase decisions of the people around them. We are determined to adapt our business and lead the way with transforming services and products for the future.
1 The methodology for NPS is currently under review. This data has been calibrated in line with our past reporting practices.
Helping consumers
The digital economy continues to disrupt our competitive landscape and, in response, we are transforming to deliver compelling, multichannel customer experiences. MyPost plays a significant role by providing a personalised way of delivering contemporary services to consumer and small business customers.
We currently offer a range of MyPost services to simplify delivery processes and connections to service providers such as banks, utilities and telecommunication companies. In 2015/16, 1.9 million consumers registered a free MyPost account, an increase of 190.0 per cent. MyPost Deliveries provides a personalised way for customers to access and manage parcel delivery services. Through their MyPost account, customers have the choice, convenience and control to get their parcels at the time and place that suits them – at home, on the go or at the Post Office. Delivery choices include Parcel Lockers, Parcel Collect, Safe Drop and redirect. With tracking and notifications through MyPost, customers can find out where their parcel is and know the moment their parcel has arrived. Customers can also search, lease and pay for a new post office box online.
MyPost Digital Mailbox helps customers manage and make selected bill payments all in one place. It provides free, secure storage for documents, such as birth certificates and travel documents, from any internet-connected device. Customers can receive digital receipts for purchases made at the Post Office, as well as WA Police checks and Fit2Work police certificates. Mail2Day notifications let customers with PO Boxes know when they have mail in their PO Box. Every Australian adult has access to a free MyPost Digital Mailbox.
Federal concession card holders can tell us who they are through MyPost Concession, which means they get concession rates for Mail Hold and Mail Redirection services. We also give these customers a free booklet of five concession stamps and access to up to 50 concession stamps per year.
International products makes sending overseas easy
Tomorrow’s world is a global community and marketplace. We deliver to more than 190 countries and lodgement via 15,357 street posting boxes and 4,392 Post Offices nationwide. 
In response to customer feedback, in 2015/16 we made it simpler to send items overseas. We relaunched a comprehensive range of international delivery options, which gives customers a clear choice of International Courier, International Express, International Standard, Registered Post and International Economy Sea and Air services. These options are all available in business hubs, Post Offices and online, via Click and Send.
Travel products
People are travelling overseas in increasing numbers, so we provide a one-stop shop for travel services. Travellers can now organise currency, travel insurance, TravelSIM, passports and passport photos at our Post Offices, where we help people get organised in a simple and secure way. The Load&Go Travel Card continued to prove popular, offering a convenient, flexible way of accessing money while travelling, with the extra security of not being linked to a bank account.
Connecting with customers
We received 182 million digital visits during 2015/16, 25 per cent higher than the previous year. Of these 164 million were to auspost.com.au. More and more people are using our website to do everyday jobs such as track a parcel, look up a postcode, or get more information about our range of products and services. In fact, the number of self-service actions on the site has grown by 16 per cent in the last year, so we are working hard to ensure we keep changing to meet customers’ evolving needs.
Fifty-two per cent of customers visit our website via mobile devices and our website is undergoing a transformation to provide customers with a more seamless and personalised experience. One example is PO Boxes online, where customers can check availability at their preferred Post Office and complete the application and renewal process online.
When our Customer Contact Centre launched 24/7 online support for small business customers registered with My Post Business, our employees were delighted to get involved, with many opting to adjust their shifts to work through the night. 
Small Business customers can now get in touch with us via Facebook, Twitter or by live chat. They can also use the click-to-call function, where they can choose to have one of our team call them back during extended telephone support hours.
This year we also continued to extend our Customer Relationship Management capability used in our customer contact centre into delivery centres, Post Offices and other support areas, enabling a 55 per cent improvement in customer query resolution. In line with the increase in self-service via our website, over a third of our customer enquiries are now via our online channels (web and social).
Australia’s favourite online retailers
With eCommerce continuing to grow in Australia and globally, StarTrack’s exclusive naming partnership with the Online Retail Industry Awards (ORIAs) provides a platform to continue positioning ourselves as one of Australia’s leading eCommerce companies.
This was the second – and biggest-ever – year of the StarTrack ORIAs People’s Choice Award with around 100,000 loyal online shoppers voting for 750 of their favourite online retailers, ranging from familiar household names to Aussie start-ups. This is the only category that gives online shoppers the power to vote and decide the winner. 
Ten diverse finalists were shortlisted with Catch of the Day announced as the overall People’s Choice Award winner. This year’s awards also saw the introduction of a brand new category to recognise and celebrate smaller online retailers, with alternative clothing store Beserk taking out the People’s Choice Award for Small Business.
Helping small business
In October 2015, we launched our We Love Delivering for Small Business campaign signalling our commitment to help Australian small businesses go online, grow their business and export.
In May 2016, we launched our new tailored small business experience, accessed via free in-store or online registration with MyPost Business.
These enhanced services include specialised 24/7* online support with live chat and extended hours phone support, exclusive offers, monthly discounts and invitations to courses and events, a free parcel scanning app to make order tracking easier, and new tools to let customers easily pay for and print their own shipping labels online.
We’re also supporting small business through thought leadership articles from our Australia Post leaders, small business event sponsorships, a new Australia Post for Business Facebook page, and the Small Business Conversation.
Creating a small business community
The Australia Post Small Business Hive, launched as a pilot in Geelong in early 2016, is designed to support and enable growth of small and start-up businesses. The Small Business Hive is a membership based, co-working space offering small businesses a range of services including:
•	high-quality, shared workspaces with security, privacy, high-speed internet access and quality business equipment
•	a program of events and education to provide knowledge, assets and advice
•	a connected community culture to foster collaboration between businesses and the broader community
The Small Business Hive has been purposefully designed to foster a collaborative business culture that inspires innovation and entrepreneurial activity among the small businesses of Geelong. This is positioning the growing regional city well for a dynamic future.
Investing in small business – Mailplus majority investment 
As part of our commitment to Australian small businesses and building partnerships with them from the beginning of their journey, in April 2016 we made a majority investment in Mailplus, a national franchised network for collecting, delivering and lodging mail and parcels on behalf of small businesses. With this investment in Mailplus, we will be able to provide a range of new services to make it simpler for small businesses to complete their everyday important jobs, including collecting their mail from their PO Box.
Mailplus employs approximately 20 staff in management and administrative support functions, and operates 123 territories supported by 178 vehicles. It has a national footprint (with the exception of the Northern Territory) and has over 6,000 small business customers. 
Mailplus remains a stand-alone business, helping Australia Post to provide small businesses with the services they need – when they need them.
*excluding public holidays
Catch of the Day
With an impressive track record of growth, deals website Catch of the Day has established itself as a top online destination for thousands of deals on the latest streetwear, fashion, homewares, toys, groceries and more. Catch of the Day first set up their online shop in 2006 with five employees and a 200m2 warehouse, and has since grown to become one of the largest parcel distributors in the country. It now boasting a robotic automated picking system at its 25,000m2 inventory warehouse in Melbourne’s south-east.
New innovations like these have allowed the group to work smarter and deliver customer orders in record time, especially over important busy seasons like Christmas and Easter. Together with its sister brands (Scoopon, Mumgo and Grocery Run) Catch of the Day’s parent company, Catch Group, fills more than 8,000 orders every day. The group first partnered with Australia Post’s parcels business in 2006, and has been using us for their deliveries, every step of their journey, ever since. Today, Catch of the Day offers its customers a range of delivery options, including express post, delivery to parcel locker, parcel collect & PO Box, and easy returns backed by seven-day customer service.
Adam Rudy, General Manager of Customer Experience at Catch of the Day said, “Catch of the Day and Australia Post have been around from the early stages of online shopping in Australia and, as our businesses have gone from strength to strength, we’ve helped each other grow. Customer satisfaction is paramount to us, and Australia Post shares the same philosophy.”
Helping business and governments
We have a range of eCommerce solutions that respond to the changing needs of our corporate and government customers.
Digitise existing services
We have a suite of digital identity, payment processing and information management services to help accelerate the digitisation of existing services and back-office processes.
Multi-channel service delivery 
Australia Post is uniquely positioned to facilitate secure transactions and has exclusive access to services with our unrivalled network of Post Offices. This includes substantial coverage in rural locations, as well as our digital channels and capabilities. We enable governments to design and adopt new service delivery models by sourcing and consolidating core services and integrating new technologies. 
Citizen engagement and eMarketplaces
Our eMarketplaces platform uses a flexible approach where we co-design a people-centred and cost-efficient experience for streamlining the application, identity verification and online payment processes, while securely delivering goods electronically and physically. 
Solutions design and managed services
We help all levels of government deliver sustainable ways to migrate customers to digital channels, while improving citizen access to everyday, important services. From establishing new online marketplaces to managing online registries, we offer a range of consulting, online hosting and support and maintenance services. 
Identity services 
We reduce the friction and inefficiency often associated with individuals proving their identity across several hundred million transactions performed every year. Services include document witnessing, physical and electronic identity verification, biometric capture (fingerprints, voice and photographic data), identity authentication, working with children checks, passport services, police certificates (WA), and land title transfers.
Payment services 
Our payment processing, disbursement and banking solutions help organisations provide payment experiences consumers can use and trust in their everyday transactions – be it online, via mobile devices or through our nationwide retail network. 
Information management services
We offer efficiencies and cost savings, a reduction in paper-based processes and improved risk management and compliance through secure, searchable, online archive capability. 
Engaging our stakeholders
Our main stakeholder groups include our shareholder (the Australian Government), our people, our customers and the broader community. We also have important links with regulatory bodies, suppliers, industry organisations, peak bodies and environmental groups.
We depend on the support of all of these groups and actively engage with them in ways that suit the relationship. Every year we conduct surveys, interviews and focus groups to understand the needs of our stakeholders and the way our business affects them. 
We discuss our postal and logistics services with consumers, small business and corporations. 
We also conduct staff attitude surveys and focus groups to understand what our employees think about our business. The data and research we collect enable us to draw better insights and improve our stakeholders’ experience.
Engaging the community in the need for letters reform 
In 2015/16, it was particularly important that we worked closely with the community in discussing the declining use of letters and the best way to adapt our business to continue providing relevant services to the community. We engaged our people, customers, the community, the government and media on the issues surrounding the sustainability of our letters business. The two key reform changes were the BPR increase to $1 and the introduction of the two-speed consumer letters service.
Having received federal government support for reform in March 2015, the community engagement activity between July 2015 and January 2016 was focused on helping the community understand what the proposed changes meant for them. We also asked the community to share their views on the proposed reform and reinforced our commitment to continue providing relevant services to the community. 
To continue the face-to-face engagement with local communities, Listening Posts continued to roll out throughout the second half of 2015 to explain proposed changes and hear feedback about our services in local areas. These events were often hosted by local members of parliament, who were keen to hear their constituents’ firsthand experiences with Australia Post and to gain a deeper understanding of community views about the service. 
Since May 2014, 206 Listening Posts have been held in 204 towns across 131 federal electorates.
Feedback consistently showed that this grassroots approach addressed community concern and built understanding and support for the changes. Events were facilitated by our area and regional managers, strengthening the relationship between our local managers and local communities.
Continuing the conversation online 
Through the National Conversation platform auspost.com.au/conversation, we enabled the entire community to participate in a conversation about our future. 
Australians used this platform to find information, including videos and fact sheets, about Australia Post and the proposed changes, to participate in a discussion forum, ask questions, or take part in quick polls.
As at 30 June 2016 more than 170,000 people had visited the National Conversation to find information or participate in a conversation. 
Thirty-five per cent of visitors undertook some form of activity to become informed about the proposed changes. 
In October 2015, we launched the Small Business Conversation website to gain insights into how we can better support small business. By engaging small businesses in conversations about the things that matter to them and understanding the challenges and concerns they face in the community, we will be better able to provide products, services and connections for them and their customers. Still in its infancy, the Small Business Conversation site has had more than 10,000 visits since its launch.
Our Stakeholder Council
The Australia Post Stakeholder Council provides advice and guidance on a range of issues throughout the year. The council also reviews and guides our approach to best practice integrated annual corporate responsibility (CR) reporting. 
The Stakeholder Council comprises nine members representing a range of views, chaired by an Australia Post Board member. In 2015/16, the council met three times. With roles and experience in small and medium business, community services, industrial relations, marketing and corporate responsibility, our council members are:
Sommers Botha – Former General Manager, Retail Scholastic Australia
Rhonda Cumberland – Former CEO, Good Shepherd
Graz van Egmond – Executive Director, Banksia Environment Foundation
George Etrelezis – Small Business Consultant
Dennis Jenner – Former Director, Post Office Agents Association Limited
Felicity Pantelidis – Chief Operating Officer, Slater & Gordon Lawyers
Geoff Rohrsheim – Founder/Executive Director, The Silver Lining Group
Cameron Thiele – Formerly of the Communications, Electrical and Plumbing Union
Phil De Young – Consultant & Former Principal, Carey Baptist Grammar School
Stakeholder Council Statement
For the past few years, the Stakeholder Council has had the opportunity to review Australia Post’s approach to best practice annual reporting and provide their views in relation to corporate responsibility. In reviewing this year’s integrated annual report, we believe that Australia Post has continued to demonstrate its commitment to corporate responsibility, including social and environmental sustainability. Efforts to evolve the coverage of the corporation’s material issues and further integrate its social and environmental performance within the 2016 report reflects a strategic approach to a whole-of-business focus on delivering improved social and environmental outcomes for the Australian community. The Council believes that this report again provides a transparent and clearly integrated representation of the material in relation to Australia Post’s performance.
Australia Post Stakeholder Council August 2016
Go Digi 
It is estimated that 16 per cent of Australians, around four million people, are not online. This means they aren’t able to take advantage of the education, health and social benefits of being connected. Research also suggests that the greatest barriers to people getting online are skills and confidence. 
As part of our strategy to increase participation in a digital world, Australia Post partnered with Infoxchange to create Go Digi, a four-year digital literacy program that aims to support Australians to improve their digital skills and confidence. 
The Go Digi website houses a number of resources, including easy-to-read learning guides on a range of digital topics, and tips and tricks on how to be a great Go Digi Mentor by sharing your skills with a colleague, family member or friend. The site also enables users with a search tool to find face-to-face learning sessions run by “network partners” such as neighbourhood houses, community centres and libraries. 
Go Digi is also a great additional resource for Australia Post employees who are looking to improve their online potential.
Industry consultation
A critical aspect of the reform of our letters service was ensuring that we engaged extensively with our customers about the proposed changes. We achieved this through face-to-face briefings and formal communications. 
We were able to have more discussions about how the industry might be impacted by reform at an industry consultative forum. The forum included representatives from unions, licensees, major mail users, industry associations and other important stakeholders, and aimed to help the mail services sector achieve long-term sustainability.
Through this forum, we were able to design a package that helped to alleviate the impacts of reform. The package included increasing the discount on promotional post until mid-2017 and continuing to minimise cost increases for the not-for-profit sector.
Community programs and partnerships
One Netball Program
We partnered with Netball Australia to create the Australia Post One Netball Program, which includes a range of initiatives at national and local levels to raise awareness, understanding and participation around diversity and inclusion. The One Netball Community Awards celebrate individuals, clubs and associations who go above and beyond to welcome everyone in netball. In July 2015, the Paraburdoo Netball Association was one of seven national winners for its work in increasing netball participation in their remote community in the Pilbara.
AFL
Our partnership with the AFL is focused on celebrating diversity and multiculturalism in the community, using the AFL Multicultural Round, Community Camps and player Ambassador Program to reach our audience. In these activities we celebrate diversity and connection to community through football. Using media and partner channels, we tell the story of football bringing communities together from grass roots local games to elite AFL competitions.
Good Spender
The Good Spender online marketplace is the result of a unique partnership with Social Traders, reflecting the social enterprise movement that is gaining momentum. We have grown the Good Spender social enterprise platform through a focused consumer marketing campaign and dedicated resourcing to welcome and support small social enterprises. 
Santa Mail
Santa Mail is an ongoing annual initiative that engages the community during the festive period by encouraging school children to write a letter to Santa.
Innovation Index
The Innovation Index report was launched in 2015 as a diagnostic assessment tool to measure the depth and breadth of innovation capabilities across the not-for-profit sector.
Australia Post and Westpac partnered with GiveEasy to help fund the research and production of the report and delivered a series of Australia-wide events.
Our Neighbourhood
Our Neighbourhood Trust
Our Neighbourhood Trust is a public charitable trust fund established by Australia Post in 2013. The Trust distributes funds raised as part of the Our Neighbourhood Community Grants program. The Trust has helped fund 383 community projects since 2013. 
Our Neighbourhood Grants Programs
Our major focus is to promote healthier, more vibrant and inclusive communities by building capability within communities and leaving a positive legacy around Australia. In 2015/16, we successfully awarded 86 grants to projects that build skills and capability of individuals, community groups, small businesses and the wider community. Focus areas for funding included employment pathways, community inclusion and disaster readiness. To view details of all our grant recipients visit ourneighbourhood.com.au/grant-winners
Doing it Differently Day
Doing it Differently Day is an annual fundraising day of action where employees can pledge to do something different to raise funds for the Our Neighbourhood Trust. Just under $50,000 has been raised so far through Doing it Differently and this will be distributed via the Our Neighbourhood Community Grants program, to groups and organisations around Australia in need of assistance.
Lifestyle Solutions Work Assist
Our partnership with Lifestyle Solutions (a not-for-profit disability services provider) to develop the Work Assist program has provided more than 25 opportunities for people living with a disability to gain skills, knowledge and hands-on work placement through the Australia Post Group business.
The partnership also provides community mail programs in Alice Springs, Northern Territory and Mayfield, New South Wales, which provide additional work experience opportunities for people living with a disability. 
During the year, Bindi Enterprises, a local Lifestyle Solutions organisation and Australia Post contractor, extended its service to two new locations, Larapinta Valley and Hidden Valley. Residents of that area no longer have to collect their mail from the Tangentyere Council offices. The supported staff of “Bindi Mail” are also involved in other employment opportunities, such as at the Mwerre Anthurre Artists Studio, refurbishing Qantas headsets and screen printing.
Our future outlook
We love delivering an exceptional customer experience, which means continuing to understand our customers’ needs and the expectations around access, convenience and choice.
Our future will focus on delivering seamless experiences across all our customer channels and delighting our customers with our unrivalled range of parcel delivery options.
Measuring our impact 
This year, we invested more than $7.05 million in the community. This figure comprised cash, time, in-kind donations, and management and operational costs to support our community programs.
Australia Post is a member of the London Benchmarking Group (LBG) and sits on the group’s Steering Committee. We measure our community investment using the LBG’s internationally recognised approach and the data we report is verified by LBG each year.
A copy of LBG’s verification statement can be found at auspost.com.au/annualreport2016
Total value of contributions (excl. Management costs)
Allocation of cash, time and in-kind contributions 
Allocated area 	Proportion of investment (%)	
Arts and culture	 1.0	
Economic development	6.0	
Education & young people	16.3	
Emergency relief	0.6	
Environment	3.6	
Health	4.5	
Social welfare	58.9	
Other	9.2	
Total	100%	
This chart shows the distribution of cash, time and in-kind contributions made in FY16, with social welfare (58.9 per cent) and education & young people (16.3 per cent) representing the largest areas of community investment.

Our customer network
Every day we reach more Australians than any other company – through our 11.5 million delivery points.
Our combination of Australia Post and StarTrack creates a competitive advantage no one can match. Our unrivalled network is fundamental to the value we create for the Australian Government, businesses and communities.
We connect everyone, everywhere, everyday – including connecting people from Australia’s most remote communities and country towns to anywhere on the globe. 
We deliver to 190 countries and our network incorporates our gateways into Asia through online marketplaces JD.com and Tmall Global, as well as access to retailers who only ship within the USA, via Shopmate. This year we expanded our partnership with Qantas, which means we can offer businesses, manufacturers, wholesalers, retailers and eCommerce companies access to the best air freight network in the country (see page 20 for details).
However, it is our physical network of 15,357 street posting boxes and 4,392 Post Offices that most Australians traditionally associate with our services. We are committed to meeting our Community Service Obligations (CSOs) when providing our mail services, which includes providing a letter service that is reasonably accessible to all Australians wherever they reside. 
Our corporate, licensed Post Offices (LPOs) and Community Postal Agencies (CPAs) are critical to our ability to maintain our strong rural and regional network. 
As our customers increasingly move to accessing services and information via social, mobile and online platforms, we are providing the appropriate access to our network, across all platforms – physical and digital.
Investing in a sustainable network
During the year we officially opened 11 new Australia Post superstores and two more open-format stores in Greensborough and Forest Hill, Victoria, bringing our total number of superstores to 65. We currently have 16 superstores in regional locations, with the aim to increase this to 50 by 2020.
To help our employees and licensees provide premium service, we rolled out a new operating system to more than 8,300 counter terminals. This served to streamline customer transactions for more than 3,600 Post Offices, including LPOs.
In 2015/16, 28 franchised Post Offices transitioned to LPOs and we continued to actively support the LPO community by offering a range of payment increases including:
•	An additional $51.4 million in payments over four years to support the LPO and Community Postal Agency (CPA) network, particularly in regional and remote Australia.
•	New digital payments for LPOs, where the nominated licensee receives a payment for selected online transactions whenever a MyPost Deliveries customer selects an outlet as their “home” LPO. 
We also rolled out a flexible point-of-sale system to 380 rural and remote LPOs to enable them to provide electronic services. 
One of the problems faced by rural and remote businesses with low population density is the challenge in meeting minimum order requirements for retail merchandise. In 2015/16, we continued our LPO Buying Program that allows LPOs to buy merchandise from corporate Post Offices at discounted rates.
Improving the delivery experience
We completed the second phase of facility upgrades at the Melbourne and Sydney parcel facilities in 2015 – enabling these facilities to handle more than 1.3 million parcels per day and importantly, providing a safer workplace for our people.
This year, we started trialling a number of initiatives that are aimed at improving first-time delivery rates. These pilots include delivering in the hours before and after work, as well as a trial of second-attempt delivery. We also trialled personal parcel boxes at residential homes in Port Melbourne during May. We’re also working closely with a range of body corporates to encourage them to install communal parcel lockers in apartment complexes. We’re already seeing some good results with these trials, with the first-time delivery rate increasing across the board. We’ll continue to invest in trials that have the most significant impact on successful delivery.
With our 24/7 parcel lockers now installed at around 250 locations, we delivered more than 1.4 million parcels to a collection point in 2015/16. As we strive to continue improving our delivery service for the customer, we introduced the popular “Safe Drop” option on MyPost, where customers can register their preference for us to leave a parcel in a safe place when they’re not at home.
Using our unrivalled network to deliver customer solutions
Collectively, Australia Post and StarTrack have one of the most robust and flexible logistics and delivery networks in Australia. This provides us with extensive opportunities to leverage our network and reach to provide businesses with scaleable, timely and customer-focused solutions.
Late last year we ran a local trial with Booktopia, an online book retailer in Sydney, to provide their customers with a same-day delivery service. 
Customer orders placed online before 11am were picked at the Booktopia warehouse and collected daily by our StarTrack fleet. These were then transported to our delivery facility in St Leonards where posties completed the final step of delivering the item to the customers’ door. 
The trial demonstrated the power of our network and our ability to design tailored freight and delivery services to meet the specific needs of customers.
Making cyber safety a critical priority
During 2015/16, we held frequent and regular education and awareness campaigns to ensure that cyber security around our network remains top of mind for our people and our customers. 
During the year we provided tips on virus protection, information security, privacy, data safety and guarding against cyber threats. As part of planning for the new year, in January 2016 we advised people to take stock of online accounts, connections, passwords and devices to reduce the potential for fraud and security weaknesses. 
It is vital that confidential customer information does not end up in the wrong hands and we’re committed to protecting customer security and helping people stay safe online. We provide small businesses with updates on email scams, detailed information about online security and fraud and offer a free identity theft support service, iDcare. Available on 1300 432 273, iDcare is a partner of Australia Post and provides support for a range of identity theft issues.
New in-store options – from pop-ups to point-of-sale
We strongly believe in testing ideas in our ready-made marketplaces and, in 2015/16, we conducted in-store trials across a broad spectrum of customer-centric concepts. 
In the lead-up to Christmas, six stores across Victoria and New South Wales ran pop-up stores promoting five of our leading online retail partners. Post-trial surveys showed an increase in brand awareness in all the retailers involved, opening up more shopping options for customers and greater opportunities for our partners. As part of the Mother’s Day online shopping campaign, we also trialled Bellabox pop-up shops in Melbourne and Brisbane.
To reduce queue times and optimise the customer experience, we tested a mobile point-of-sale process where a staff member used a handheld device to process simple transactions and payments as people waited. This was taken a step further at the Merimbula Post Office, which conducted a trial in partnership with the Department of Human Services (DHS), where customers were given access to a face-to-face information service and DHS self-help facilities.
Investing in advanced mail processing machines
A component of the reform of our letters service involved investing in advance automated processing technology. While letter volumes continue to decline, we still process around 3 billion letters a year. This investment was another key step to building a sustainable letters business.
Preparations for the installation of the first of the machines commenced at our four major mail processing facilities in Brisbane, Melbourne, Perth and Sydney. This included establishing local working groups at each site to help design and plan for local implementation. 
In June we completed assembling the Flat Sorting machine and the Culler Facer Canceller Preparation machine in Sydney and Melbourne, respectively. These machines will come online in September and October following a rigorous testing period.
Machines at our Brisbane and Perth facilities will come online in 2017. 
The new machines are designed to exacting safety and ergonomic specifications, are more efficient and can process significantly more letters per hour than our current machines.
To support our new mail processing machinery, in June we commenced introducing 800,000 new large letter trays to the network. 
Following a rigorous tender process, Australia Post enlisted one of Melbourne’s oldest family-owned manufacturers, Sneddon & Kingston Plastics (SKP), to design and make the recyclable plastic trays. Australia Post is proud to have supported a local small business.
“In an environment where companies are turning to foreign suppliers for goods, it’s great to have the support from one of Australia’s most trusted and recognised brands,” 
says Blair Sinsheimer, General Manager, SKP.
Building capacity in our delivery network
We’re always on the lookout to do things differently to provide better services for our customers and provide a sustainable future for our business. 
Our goal is to create a delivery network that’s designed around the customer, so that our posties deliver on a vehicle that suits the terrain and can safely and securely carry a range of customer product, whether that’s letters or bulkier packages.
This year we trialled a trike at a number of our delivery facilities. The trike has a larger carrying capacity than our motorbikes and electric bikes, and features a large lockable compartment to secure letters and parcels on the rear and a carrier on the front. 
We’re also looking abroad to see what other postal agencies, such as New Zealand Post, are using to give us ideas for what might be suitable for Australia’s large and diverse geography. We plan to trial a number of vehicles next financial year.
The modern postie
We currently have more than 7,000 posties who deliver mail all across Australia. As letter volumes continue to decline, we need to look for innovative ways to ensure the role of the postie is sustainable.
Over the past few years we’ve implemented a number of initiatives – for example, in 2013 we starting streaming small parcels (weighing under 2 kilograms) through the postie network for delivery to the customer. 
This enabled our parcel delivery people to focus on the delivery of larger items. Earlier this year, in regional areas we added to the postie’s panniers StarTrack Premium small parcels. Our posties now deliver a significant proportion of our total parcel volumes. 
In some regional areas, we’ve transferred street posting box clearances to posties, who complete this work when returning from their delivery rounds and their pannier bags are empty.
We’re continuing to explore other new opportunities to leverage our trusted brand and the community presence of our posties, who deliver to almost every address in Australia. 
In May 2016, we completed a small trial, reading water meters at 5,500 residential and commercial addresses across a small number of suburbs in Sydney. The trial helped to measure the operational and commercial feasibility of offering this type of service on behalf of utility companies.
Stamps update
In September 2015, our Philatelic team launched a new collectables website providing a central resource and social platform for global collecting enthusiasts. 
auspostcollectables.com.au
Our diverse 2015/16 stamp issue program included themes that continue to celebrate important cultural milestones and events. Included was A Century of Service: Animals in War, Centenary of WWI: 1916. Preparations were underway for the late 2016 release of the Rio Olympic Games Gold Medallists stamps and Seabirds of Norfolk Island, the first issue as postal authority for the external territory.
Our future outlook
With our post offices central to connecting communities across the nation, we will continue to redefine the role and service offering to meet the contemporary needs of all Australians. 
Our aspiration is to help create new digital futures by connecting people, businesses, government and organisations to each other and the world.

Our innovation 
Our expertise
Innovation creates new value for our customers and communities, ensuring a sustainable enterprise for our people and shareholder. 
While changing technology and a globalising world is providing many challenges to our letters business, it is also providing significant new opportunities to use the assets of Australia Post to solve the new and emerging problems of customers and communities around Australia.
The focus of our innovation efforts involve making eCommerce, egovernment and the broader digitisation of trusted services more accessible. Pursuing these opportunities will enable all Australians to start and grow businesses, participate in global marketplaces and access government services. 
There are three major developments supporting innovation at Australia Post:
•	supporting all our people in listening to customers and solving customer problems
•	co-creating new products and services with leading customers in our solution centres in eCommerce and trusted services
•	launching the Australia Post Accelerator which partners or invests in new businesses created internally or via our investment fund
Innovating with our people
The basis of innovation continues to be our people. Their passion for customers and communities has been the core of the development of Australia Post for over 200 years. Today we are equipping them with enhanced tools and data to understand the customer requirements and improve the customer experience. The roll-out of our customer feedback management system and NPS tools is providing new opportunities for all our people to listen and solve customer problems. Employee immersion events known as The Grapevine give people across our business the opportunity to engage in the future of Australia Post and their role in making changes that benefit customers and our business. 
Hack Dayz, where employees come together to identify customer problems and work intensively on building or “hacking” a working prototype or solution, are now common events inside Australia Post. Recently an “intrapreneurship” program where employees initiate new business ideas to test and develop with customers has also been introduced.
Innovation arenas reflect new customer challenges and opportunities
The Australia Post Accelerator has four strategic areas of focus: 
The home of the future – reimagining home logistics and services as Smart home and Internet of things technology evolves
Logistics of the future – examining the ongoing change and disruption to logistics in an eCommerce world
Trusted services of the future – solving the digitisation challenge of identity and service when trust is paramount
eCommerce and eService acceleration – enabling everyone, everywhere, everyday to have access to and capture the opportunity from eCommerce and eGovernment
Based on solving key customer challenges, these arenas guide investment and acceleration support provided to Australian start-ups by the Australia Post Accelerator.
Innovating with our customers
Our product, sales and marketing teams are aligned to customers and today work collaboratively to solve our customers’ most important problems. Design thinking and agile delivery teams are now a core part of the capability of these teams. This year we worked with customers on many important future developments that included:
•	same day delivery options for leading online retailers 
•	new delivery solutions for regional customers through 
drone trials
•	new co-working workspaces called the Small Business Hive, designed to support the business service and space needs of entrepreneurs and start-ups in local communities
•	continued development of eCommerce application programming interfaces (APIs) and self-scanning applications for small to medium businesses
•	new digital “one stop” change of address applications for corporate and governments.
We are also investing to support a more innovative Australia. Our Go & Grow Online events continue to be popular, particularly in regional Australia. In a forum designed to foster conversation about online opportunities, we bring in experts to discuss topics such as search engine optimisation and best practice eCommerce, so entrepreneurs can start online businesses, and established small businesses can grow and export. In 2015/16, we held 38 Go & Grow Online sessions with expert presenters, most of which were hosted by local members of parliament. 
Other events involved our eCommerce partners Google, Facebook and LinkedIn, to help business gain insights from industry leaders about online trends and growth opportunities. 
In 2015/16, we created an integrated campaign to promote the opportunity all Australians have in eCommerce. We Love Delivering was used to demonstrate the idea that now every Australian, everywhere, can start a business and their first customer can be anywhere in the world.
In 2016, we also launched on Alibaba’s business-to-business marketplace, called 1688.com. There are now five Margaret River (Western Australia) wineries on our 1688 storefront and recent orders included a shipping container of wine to China. Demand for quality Australian products in unlocking a world of opportunity for local businesses wanting to grow into China.
Further opportunities are available through our agreement with JD.com, China’s second largest online retailer. This includes a flagship online store showcasing Australian products, which exposes Australian businesses to more than 500 million customers on the JD Worldwide website.
Our strategy is to empower consumers, business and government to connect, create and thrive in the digitised future. This means growing our role in government service delivery, creating products that connect our communities to everyday services, like bill payments, and expanding our capability in identity, payment and information management services. Our range of services keeps growing and all four major Australian banks now use Bank@Post.
We are also providing identity services on behalf of the Victorian Land Titles Office, working with the Northern Territory Department of Transport to digitise vehicle licensing and the Queensland Government to process fishing licenses. In South Australia we are investigating a return to work solution that involves scanning compensation claims at Post Offices. Through our Decipha business we also offer digitised donations for charity groups, to encourage greater contribution through convenient channels.
From the seemingly simple notion of enabling customers to search and lease Post Office boxes via the internet using PO Box Online, to the digital native-style Snap It App launched in July that allows employees to log customer queries, safety and damage issues immediately, we have made customers the focus of our eCommerce discoveries and services.
Australia Post Accelerator
In late 2015, we announced the launch of the Australia Post Accelerator that would invest in new business creation and external start-ups. The Australia Post Accelerator is now engaging with the Australian startup ecosystem, creating opportunities for entrepreneurs to work with us and solve
a new set of challenges and capitalise on emerging opportunities that the eCommerce and eGovernment world is creating. 
The accelerator offers support by providing eCommerce tools for entrepreneurs and broad sponsorship for entrepreneur programs, with a special focus on rural and regional outreach and female entrepreneurship. It also invests in outstanding Australian entrepreneurs through the $20 million Australia Post Investment Fund.
Operating separately from our core business activities, the accelerator leverages Australia Post’s assets and networks, enabling it to operate with the agility of a start-up while still providing emerging small business and entrepreneurial partners with the advantages of corporate backing.
StarTrack business breakfasts building innovation
Our popular StarTrack Business Breakfast series continued during the year, with two well-attended expert panel discussions at the Grand Hyatt in Melbourne and Sydney’s Ivy Sunroom. A combined total of more than 180 online retailers from various stages of the business lifecycle took part, including eCommerce partners Temando, PayPal and Shippit.
Guest panels, comprising leading Australian businesswomen in the eCommerce sector, helped our business customers innovate and improve their online customer experience. Panellists shared insights on what it takes to succeed in an increasingly competitive and rapidly evolving digital world, drawing on their own experiences using social media, delivering seamless customer experiences and creating brand loyalty to drive customer growth and retention.
Working with WA Police
In 2015/16, together with Western Australia (WA) Police, we won a government innovation award for our digital identity solution for National Police Certificates. Many government agencies are digitising their services and our unique position is the ability to provide an omni-channel service offering, where customers can elect to use the Post Office or an online option, to help the agency improve its customer service. 
Our partnership with the WA Police involved digitising their National Police Check process. Performing in-person Police Checks is something we have done at our Post Offices since 2007. During 2015/16, we created a streamlined digital process that links to CrimTrak and includes:
•	online forms
•	electronic identity verification
•	QR codes 
•	online payment processing
•	secure online delivery and storage in MyPost Digital Mailbox.
A process that previously took a number of days can now be completed in one hour. As a provider of eGovernment services, we are using innovation, our network and our trusted eCommerce solutions to provide innovative and relevant options for customers. 
Partnerships driving innovation 
Many of our partnerships involve integrating online tools and software to help our business customers sell, track and send their online orders in a more streamlined, secure and simple way. For example, our customers use online platforms like Temando and NetSuite to a access a range of business services to manage orders, print labels and so on. By integrating with an eCommerce platform that partners with Australia Post, businesses of all sizes can access our shipping and tracking services.
Similarly, by leveraging our partnerships with international online marketplaces, Tmall Global, eBay, Amazon, Good Spender and Farmhouse Direct, we enable businesses to find and connect with new customers and create revenue.
Sponsorships of Melbourne Accelerator Program – supporting entrepreneurs
Last October Australia Post announced a three-year sponsorship of the University of Melbourne’s Melbourne Accelerator Program (MAP). This sponsorship reflected Australia Post’s ongoing commitment to support young entrepreneurs in Australia. It also aligned more broadly with Australia Post’s community outreach programs supporting small business in rural and regional communities like the 2016 Go Online and Grow Online event series. 
This year the MAP sponsorship provided two additional places for aspiring eCommerce start-ups within the MAP16 Start-up Accelerator intake. It also awarded a new Wade Institute Master of Entrepreneurship scholarship to Sarah Agboola, a young entrepreneur from regional Wagga Wagga, and drove support for a range of new community outreach activities including the development of a new one-day Start-up Intensive workshop for rural and regional entrepreneurs.
Some of the Australia Post Accelerator team and Australia Post’s first internal start-up teams are co-located at MAP’s working space in Carlton, Victoria.
Helping Tall Poppies to keep growing
To assist female entrepreneurs, we launched Tall Poppies, to support women with confidence building and networks, which are two significant obstacles for women building businesses. This community outreach program provides an online conversation platform where women can connect and share ideas with other female entrepreneurs. 
An example of the power of this initiative was the group of local women who made newspaper headlines for putting Wagga Wagga on the map as a “hub of innovation”. Though country cities are not generally associated with habouring business pioneers, two of Wagga’s female entrepreneurs proved big ideas can be born from small cities. Founder of coffee-ordering app 365 cups, Simone Eyles and start-up business owner and Wade Institute’s first Australia Post scholarship winner Sarah Agboola, were featured in national media after attending our Tall Poppies Summit.
Tall Poppies events are aimed to encourage and inspire female entrepreneurs to start and grow their own businesses. The Melbourne Summit in April 2016 saw more than 80 female entrepreneurs and business leaders take part in panel conversations and discussions aimed at women in business.
Our future outlook
We are working with our customer partners to create innovative solutions including our international alliances and joint ventures, new partnerships, omni-channel services and capabilities.
We are investing in the future by evolving our products, services and capabilities to create new opportunities for growth, participation and inclusion in a digital economy. 
We will work with corporates and governments to support their digitisation strategies and use our extensive reach to ensure all Australians continue to have access to essential services.

Our people
There is no question that it’s our people who make Australia Post what it is. When we have happy employees, it translates directly to a better experience for our customers and the community. We create value by working with more than 50,000 people nationally, empowering a skilled, diverse and engaged workforce.
It is clear that employee satisfaction and engagement must remain a key priority for our business. So, in our desire to help everyone be part of tomorrow, we always strive to create a safe, secure and inclusive workplace.
During the year we introduced a number of programs for our employees, including:
•	new Shared Values (see 2016 performance highlights) which are promoted throughout the year; and living them is part of our performance gateway
•	a new online jobs, careers and development portal called Post People 1st
•	our first gender action plan to publicly address the gender diversity issues
•	a new Domestic Violence Leave policy
•	programs to support our people as we implement the operational changes that flow from the reform of our letters service.
Our people represent 140 different nationalities and speak more than 64 different languages
Total workforce
By region
State	Proportion of workforce %	
Vic/Tas	34.1	
NSW/ACT	34.4	
Qld	15.9	
SA/NT	6.2	
WA	9.4	
This pie chart shows the proportion of our workforce located in each state or territory.  NSW/ACT have the highest proportion of staff (34.4 per cent), closely followed by Vic/Tas (with 34.1 per cent).  
By type
Work type	Proportion of workforce %	
Full-time	74.4	
Part-time	24.2	
Casual	1.4	
This chart shows that 74.4 percent of our workforce is employed on a full-time basis, with part-time workers accounting for 24.2 per cent and casual employees accounting for the remaining 1.4 per cent. 
By gender
Gender	Proportion of workforce %	
Female	38.7	
Male	61.3	
This chart shows that men represent 61.3 per cent of our workforce, with women accounting for 38.7 per cent.
Turnover rate
		2012	2013	2014	2015	2016	
(%)		9.4	7.6	6.5	6.6	6.4	
This chart shows the staff turnover rates (by percentage) have been in decline since 2012 (with the exception of 2015) and continued this trend in 2016 at 6.4. 
Data based on average headcount for permanent, full-time and part-time employees only (Excludes StarTrack, redundancies and fixed term contracts.)
Safety – a core value
Safety, as the first consideration in every decision we make, is core to a successful workplace. We reward safety initiatives and run a range of programs to raise awareness about people’s role in influencing the safety culture and reducing exposure and risks. In acknowledging the imperative for a leader-driven safety culture, safety is a key performance indicator on the Executive Scorecard. 
In 2015/16, programs ranged from enterprise-wide programs such as annual Safety Time, Safety Leadership and Health and Wellbeing, to grassroots initiatives such as videos explaining hazards on postie routes and facility safety teams to drive positive safety outcomes at a local level. 
The enterprise-wide focus on safety shows that everyone has a role to play in safety leadership and it starts with a mindful approach to safety. We need to be fully conscious about the way we work and look for ways to manage exposures and prevent incidents from occurring. 
In 2015/16, we equalled our all-time record low LTIFR of 6.6. 
The incidence of lost-time injuries in our workplaces is 43 per cent less than four years ago. This is a considerable achievement and testament to the success of a wide-ranging and long-term focus on the safety culture within our business. While our results once again show an encouraging trend, they still require significant improvement and indicate that we are only part-way through our vision of creating a truly safe working environment for our people.
In 2015/16, we continued to invest in Safety Leadership programs across the business, with over 1,000 leaders trained in Safety Leadership over the past 12 months. We also had 118 of our most senior leaders across the enterprise (including StarTrack) involved in safety investigations to gain a deeper, practical insight into risk management and safety processes. 
Regrettably, there were two public fatalities connected with Australia Post this year. A customer suffered a medical emergency while in a Post Office and an elderly pedestrian was injured in a vehicle collision and subsequently passed away. Community safety remains a key priority for us, as demonstrated through our ongoing public safety campaigns.
Safety performance
	2015	2016	
Lost time injury frequency rate (LTIFR) where next shift could not be worked due to injury/occupational disease (i.e lost time, per million hours worked)	7	6.6	
Injury rate (IR) Incidents involving an injury per 200,000 hours worked	3	2.9	
Occupational disease rate (ODR) Incidents involving occupational disease per 200,000 hours worked 	1.3	0.8	
Fatalities (number)	1	0	
Fatality rate (per million km)	0.0047	0	
All occupational injury frequency rate (AOIFR) Incidents involving an injury* or disease* per million hours worked	21.5	18.5	
This table shows 2015 – 2016 comparisons of key safety data: lost time injury frequency (LTIFR) (down from 7.0 to 6.6 in 2016), injury rate (IR) (down from 3.0 to 2.9 in 2016), occupational disease rate (ODR) (down from 1.3 to 0.8 in 2016), fatalities - number (zero in 2016, one in 2015), fatality rate (per million km) (0.0047 in 2015, zero in 2016), all occupational injury frequency rate (AOIFR) (down from 21.5 in 2015 to 18.5 in 2016). 
Work-related injury or fatality claims that have been lodged and accepted. Licensees and contractors are not included.
*Injury or disease based on approved claims.
Safe Rider program a positive experience
Following a successful trial at our Nepean Delivery Facility in New South Wales, a number of staff weighing over 100kg were assisted to get back into the safe rider weight zone and, ultimately, a healthy weight range.
Phil Howarth was one of many great examples of using willpower and determination to make positive changes. Phil worked hard to build healthier habits and improve his wellbeing, having started the Safe Rider program weighing over the 100kg threshold. After making some simple changes to his diet and lifestyle, Phil managed to lose more than 20kg and felt more energetic and confident as a result. Phil knew his biggest weakness was sugar, so he faced his habit straight on – going from 400g of chocolate and up to 3L of soft drink every day, to cutting it out altogether. That alone made a big difference, although Phil said it wasn’t easy. He volunteered to come off the motorbike and onto a walk round to get more exercise at work. Getting a new dog was another factor, encouraging Phil to walk more after work.
Motivated by wanting to be around for his young family, Phil looks back now and wonders why he didn’t do it five years ago. While it wasn’t easy to make the changes, Phil said it was actually simpler than he thought it would be. “It’s a choice you have to make every day to be healthier, and I have seen the results. I have so much more energy, I wake up feeling fresh and go to bed proud of the choices I have made.
Since losing the weight, I actually feel freer and less constricted, which has made it a lot more comfortable riding my motorbike. I have come to understand why there would be weight limits – I feel the difference!”
Engaging our workforce
Our annual Say2Action survey measures employee sentiment across a number of aspects of our business and there was a high response rate in 2015/16, with 78 per cent of total staff completing the survey.
Our overall company-wide net engagement score was 57 per cent, up by 1 per cent from the most recent full survey we conducted in 2014, but down 3 per cent from last year’s pulse-check survey. 
The feedback from the survey indicated that employees are happy with the focus on safety, supporting workplace change, living our Shared Values, and communicating our strategy. The survey results also indicated we could improve our customer focus, supporting career opportunities and making sure our senior leaders are more widely available. The feedback also indicated that a continued focus on supporting our community is important to our people.
Engaging our people is important and our new Applaud awards recognise employees living the shared values.
A seamless connection through OurPost.com.au
Many of our employees are out in the community, so they don’t have a work computer. But regardless, our people tell us that they want to be able to access need-to-know information, updates and services – in real time. 
So, this year we launched OurPost, a dedicated website for everyone who works for and supports the Australia Post Group. It gives them easy access to work-related services and keeps them up to date with the latest business news.
Keeping our posties safe
While we have a range of internal training education and management programs to help manage exposures, there are some issues that require the community’s help. The Bubble Wrap Postie campaign was launched in October 2015 to raise community awareness about the danger of reversing cars. The campaign reached 1.5 million people on social media and called for the public to reverse with care and to toot their horns to warn anyone on the footpath.
More information on our public safety campaigns can be found at auspost.com/safety.
Embracing diversity and inclusion
The transformation of Australia Post into an innovative, customer-centric, leading eCommerce business is about building talent and creating a strong culture that represents our community and customers. A diverse workforce is not only the right thing to do from a corporate citizenship perspective, we also believe it translates to better business performance.
Our diversity and inclusion program (detailed in our separate Diversity and Inclusion Report, available online at auspost.com.au), celebrated many successes in 2015/16. The activities included a range of lesbian, gay, bisexual, transgender and intersex (LGBTI) initiatives including participation in MidSumma and our PostPride membership group, ongoing implementation of our Accessibility Action Plan and Reconciliation Action Plan and a strong presence during Reconciliation Week.
Our Managing Director & Group CEO, is a Male Champion of Change and leads a determined effort to provide equal employment opportunities. We launched our Gender Action Plan in October 2015, which provides a roadmap of initiatives to fast-track the development of the many talented women in our business.
During the past five years, almost 2,000 women have participated in one of our tailored development programs, such as ProjectMe (formerly MyMentor), designed to harness the talent of our award-level females, the TenProgram, Xplore and Horizon, to build a pipeline of future female leaders. These programs aim to lift the proportion of women in every area of managerial responsibility across our business.
The Recruit Smarter program is a new Victorian Government program aimed at improving fairness in the hiring process for all job seekers. We are participating in this program, which aims to eliminate unconscious bias during the recruitment process and help to remove barriers to achieving greater gender equity, progressing the agenda for women at senior levels.
Our diversity profile
	2013	2014	2015	2016	
Aboriginal & Torres Strait Islander people	1.6%	1.5%	1.9%	2.1%	
Women	39.1%	38.9%	38.7%	38.7%	
Culturally & Linguistically Diverse	23.1%	23.0%	25.5%	25.3%	
People with Disability	7.1%	7.1%	6.3%	6.0%	
Lesbian, Gay, Bisexual, Transgender and Intersex people	not recorded	not recorded	0.9%	0.9%	
Female Executives (Band 4 and above)		34.1%	33.3%	35.4%	
A&TSI: This table shows that in 2016 2.1 per cent of the Australia Post workforce are Aboriginal or Torres Strait Islander people, an increase of 0.5 per cent since 2013.
Women: This table shows that women make up 38.7 per cent of the workforce, identical to 2015, but down from 39.1 per cent in 2013.
Culturally and linguistically diverse: This table shows that 25.3 per cent of the Australia Post workforce come from culturally diverse backgrounds, up from 23.1 per cent in 2013. 
People with disability: This table shows that the number of people in the workforce with a disability is at 6 per cent, down from 7.1 per cent in 2013
LGBTI: This table shows the number of lesbian, gay, bisexual, transgender and intersex people in the workforce is 0.9 per cent, the same as in 2015 which was the first year this number was recorded. 
Female executives: This table shows that in 2016 female executives (Band 4 and above) make up 35.4 per cent of the executive total, up from 34.1 per cent in 2013. 
Australia Post only
National Reconciliation Week
Each year, National Reconciliation Week invites us to recognise two important dates in Australia’s Reconciliation journey: the 1967 referendum and High Court of Australia’s landmark Mabo decision.
It’s a time to reflect on our national identity, the progress we have made and to celebrate acts of reconciliation between Indigenous and non-Indigenous people.
We hosted a number of special activities across the country including events at major sites in all capital cities during National Reconciliation Week 2016. As a mark of respect to the Indigenous communities we serve, we unveiled 31 newly branded trucks and vehicles across Australia. The design on these vehicles represents the connection Australia Post has with Aboriginal and Torres Strait Islander communities.
ProjectMe
Since 2010, Australia Post has made significant progress in the percentage of women in leadership roles, mainly due to senior-level sponsorship and support and investment in a range of female talent development programs. In 2015, we partnered with Inkling Women to develop ProjectMe, which is positioned at award-level female employees. It aims to empower female participants to take responsibility for their career and life development by building their skills, confidence and resilience. 
ProjectMe aims to leave participants inspired, energised and connected so they are ready to take charge of their career and life outside of work.
1.4%: Gender pay gap
Closing the gender pay gap in our workplace
There has been significant media coverage highlighting the gender pay gap in Australia. Following our research of this issue across the Australia Post Group, it was pleasing to note that our gender pay gap is 1.4 per cent.
Achieving Gender Equality in the workplace is something our Managing Director & Group CEO is passionate about, particularly in his role as a Male Champion of Change. Our vision is for a gender pay gap of zero and the current result highlights the significant progress we have been making towards gender equality in our business.
Gender Pay Gap is the difference between women’s and men’s average full time equivalent annualised base salary (before tax, excluding overtime, irregular bonuses, salary sacrifice) for all active employees excluding casuals (part time, full time, trainees, including managerial employees and CEO) expressed as a percentage of men’s annualised base salary.
Supporting and developing our people 
Post People 1st is in its third year, delivering a range of employment and development opportunities for our workforce. In prioritising and supporting the future of our people through retraining or redeployment, the Post People 1st program puts our existing employees first for jobs at Australia Post, first for skill development and first for a career. 
We made a commitment that there would be no forced redundancy of any employees directly impacted by letters reform who are actively seeking jobs in other parts of the business. The majority of Australia Post employees are covered by collective agreements, except for those employed on individual contracts or individual statutory agreements. We engage in regular discussion with unions, employees and government to ensure job reductions in our postal business are managed with compassion and care. Supporting our employees through workplace changes associated with the reform of our letters service is critical to our business as it directly affects morale and culture, which in turn impacts the customer experience.
A new Post People 1st careers portal was launched in September 2015, to improve the employee job application experience and the accessibility and visibility of all internal job opportunities for our people. This careers portal also provides career coaching support and access to continued learning, with these services being actively promoted throughout the year.
We’re continuing to adapt our mail operations to align with changing customer behaviour and declining mail volumes.
Following the introduction of the two-speed consumer service in January, we’ve been closely monitoring Priority and Regular volumes. We’ve seen a shift in product migration for total addressed letter product, with Regular mail accounting for more than 80 per cent of letter volumes. 
This means we have more mail available to be processed during the day, and we need to adjust our staffing levels in response. 
This year more than 850 mail processing employees have voluntarily moved from night shift to day shift. We recognise that this change can be difficult for our people. We’re continuing to support employees with a range of programs and seminars, such as Create Your Future, Finance, Superannuation, and Staying Healthy Night to Day, which provides employees adjusting to working a day shift with practical tips about lifestyle adjustments.
Health and wellbeing
We conducted a wide variety of health and wellbeing programs during the year, to address the needs of our diverse workforce. 
We announced new initiatives ranging from a new Domestic Violence Leave policy, which supports people through additional paid leave during times of personal hardship, to our partnership with BUPA, where we offer personalised health reports.
Mental health was a key focus area for a number of programs including specific mental health training for human resources and operations managers, as well as involvement in the Black Dog Ride and the City2City fun run. We also supported employees who elected to move to different shifts at our mail processing facilities, with a “Staying Healthy Night to Day Shift” seminar. The seminar explained some of the changes people can expect when they change shifts, including practical tips
for adjusting sleep patterns and making lifestyle changes.
Our partner workforce 
We extend our influence, where we can, beyond our employees to our partner workforce including delivery contractors and licensees. 
Nearly 50 per cent of our customer-facing workforce are our partners, as a result, they play a significant role in delivering our customer centricity strategy and are often the face of the Australia Post brand. Our partner workforce plays an important role in helping us to meet our community service obligations, particularly in rural and regional Australia.
Our delivery contractors are a vital part of our network directly responsible for millions of customer interactions each week. They give us flexibility to deliver the significant increases in parcel volumes during the peak periods such as pre-Christmas. 
We expect our partner workforce and suppliers to operate to recognised standards and appropriate codes of practice. They are also bound by our Supplier Code of Conduct (see Sustainability Supplement for details).
In 2015/16, we welcomed the release of a report into management of compliance matters related to parcel delivery contract arrangements. The review, chaired independently by former Victorian Police Commissioner Ken Lay with support from law firm Allens Linklaters, made recommendations to strengthen Australia Post’s contractor engagement processes. 
We are committed to providing a fair and safe work environment to all those providing services on our behalf and have also seen the opportunity to deliver activities in a way that can drive focus on customer experience. Following the review, we have started a range of initiatives focused on:
•	customer experience
•	safety 
•	communications and engagement
•	governance and compliance.
Our suppliers
We also recognise the importance of our suppliers and consider the social, ethical and environmental dimensions of our supply chain.
For example, we actively seek to engage Indigenous businesses and social enterprises in our supply chain and work with Supply Nation, the leading directory of Indigenous businesses, and our national community partner, Social Trader.
All of our suppliers are bound by our Supplier Code of Conduct, which requires a demonstrated commitment to human rights and fair employment practices in accordance with existing international standards, such as the United Nations Universal Declaration of Human Rights, the International Labour organisation Declaration on Fundamental Rights and the United Nations Convention on the Rights of the Child.
The Supplier Code of Conduct outlines further ethical, social and environmental standards of conduct expected in the following categories:
•	Corporate Governance & Ethical Business Practices
•	Management Practices Which Respect the Rights of Employees and Local Community
•	Impact on Environment
•	Risk Management
Through our Supplier Code of Conduct, our suppliers are required to meet our environmental obligations and, where practicable, our preference is to procure products and services that:
•	source materials from sustainable or renewable sources
•	have the appropriate certification
•	source material made from recycled content
•	are able to be reused or recycled at the end of their life
•	are appropriately labelled
•	help minimise our energy and fuel use and carbon emissions
•	help minimise our water use or disposed waste.
Customer experience – discussing delivery in Derrimut
The Derrimut Parcel Delivery Centre in Victoria experimented with a new way of working with customer feedback in 2016 that proved so successful it was rolled out to many of our facilities in other states.
In reviewing the daily comments from customers, the team used the information to recognise delivery van drivers during the daily “thank you” sessions as well as the monthly recognition awards. The customer comments were also discussed during team meetings on a weekly basis.
This meant the contract drivers could see how parcel receivers view their customer service. The vast majority of the comments are positive, but where issues are raised, it allows the team to develop solutions directly and immediately.
As a result of the pilot, driver advocacy and job satisfaction increased 39 per cent at Derrimut from August to November 2015 and there has been a sustained increase in customer NPS.
The pilot has now been extended to 13 Delivery Centres.
Our future outlook
In response to technology and the shifting demands of our customers and community, our business has experienced significant disruption over the past five years and will continue to evolve from a traditional letters business to competing in global parcels and trusted eCommerce solutions. 
Our people – our employees and our partner workforce – are key to keeping up with changing demands and continuing to delight our customers. We are committed to providing our people with the skills, information and experience necessary to deliver for our customers and communities now and in the future.

Our environment
Our commitment to responsible environmental practices is as much about our iconic status as a leading Australian organisation, as it is about the direct impacts our business has on the environment. We understand that we need to manage our impacts on the environment but doing so helps reduce our costs, manage risks and improve customer value. We view the issue of environmental responsibility as intrinsic to being part of tomorrow.
To support our focus on this area, we introduced the new enterprise-wide Corporate Responsibility Strategy in May 2016. Our opportunity to create value lies both in our ability to reduce the environmental footprint of our operations and to use our network assets to create a more circular economy.
Australia Post is committed to managing our environmental impact in a way that reduces our carbon emissions and our impact on climate change. In this context, we prioritise our response to climate change and work hard to ensure that our performance is based on reality.
We’re committed to understanding the impacts our business operations have on the environment and finding ways to improve. This means minimising costs, better managing our resources and identifying avenues to create value for our customers, our workforce and for the environment.
Environmental considerations are embedded throughout our regular business activities, with sustainability requirements integrated into our business cases, as well as being a key criteria in our procurement procedures.
National Packaging Covenant and our role in recycling
As an active and committed member of the National Packaging Covenant since 2005, we focus our efforts on the design, composition and recycling of our packaging. We continue to work with our suppliers to look for ways to enhance the reuse and recyclability of our packaging, as well as increase the recycled content of our packaging materials.
We introduced a new recycling program in 2016, encouraging our customers to recycle their plastic mailing satchels. The Australia Post Mailing Satchel Brigade is a new national program with our partner TerraCycle. Customers across Australia can also now post their used plastic mailing satchels for free to TerraCycle, to have them turned into materials that help build recycled products and industrial items. Through our partnership with TerraCycle, we are now closing the waste loop on our own mailing satchels.
We are proud of our long-term retail recycling partnership with Planet Ark’s printer cartridge recycling program Cartridges 4 Planet Ark. MobileMuster is another long-term partner, where customers can recycle all brands and types of mobile phones, as well as batteries, chargers and accessories. Since 2008, through our network of Post Offices, more than 245,000 MobileMuster satchels have been returned by our customers. This amounts to 62.6 tonnes of mobile phone handsets, batteries and chargers diverted from landfill.
Our climate change position
We acknowledge that climate change is one of the biggest threats facing the world’s future, with global emissions of carbon dioxide (CO2) having increased by almost 50 per cent since 1990. The impacts of climate change will be felt by people all over the world, with some of the poorest nations being impacted the most.
Action is needed by business, governments and civil society to combat these impacts and move towards a more sustainable future. As part of our commitment to managing our environmental impact, Australia Post is a member of the UN Global Compact (UNGC) – the world’s largest corporate sustainability initiative. The 10 principles of the UNGC provide both a practical framework for action and a platform for demonstrating corporate commitment and leadership.
In a worldwide call for action, in 2015 the United Nations launched its Sustainable Development Goals (SDGs) – negotiated in part by our shareholder, the Australian Government. The SDGs provide a new roadmap for achieving global sustainability and development to 2030, seeking to mobilise global efforts around a common set of goals and targets. One of the SDGs is to address climate change.
The Australian Government is signatory to the Paris Agreement, negotiated at the 2015 United Nations Climate Change Conference, which saw an agreement reached to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and endeavour to limit them to 1.5°C.
Our achievements include:
•	reducing emissions by 17 per cent compared to 2000 levels, keeping us on track to meet our target of 25 per cent by 2020
•	in the last financial year we have achieved a 3 per cent reduction for our combined scope 1&2 emissions
•	introducing new motorbikes, vans and sedans that have enhanced fuel efficiency, including 100 hybrid vehicles and motorbikes that are 60 per cent more fuel efficient
•	launching the use of Australia’s first 100 per cent electric commercial van
•	having completed the installation of 23 commercial solar installations – 619 KW and projected carbon savings per annum of 835 tonnes
•	implementing energy-efficiency upgrades at eight sites to achieve energy and carbon savings of greater than 40 per cent.
Large Business Sustainability Leadership Award
In November 2015, we were delighted to receive the highly prestigious Banksia Environmental Foundation’s Large Business Sustainability Leadership Award in recognition of our efforts to integrate comprehensive and high-impact environmental initiatives across our business. Our success was a result of our comprehensive and impactful programs across our business.
Our carbon reduction target
To demonstrate our environmental commitment we have an Environmental Sustainability Strategy, which mandates a target to reduce our carbon emissions by 25 per cent by 2020 from a baseline year in 2000. To achieve this target we will:
•	continue to drive energy-efficiency opportunities
•	look to expand our existing solar power program and explore energy storage
•	review future fleet decisions to ensure compatibility with lower carbon fuel options
•	model the carbon and energy costs of our business cases to incentivise lower carbon decisions 
•	investigate alternative electricity-purchasing models including aggregated renewable energy purchasing.
Our approach is underpinned by a robust environmental management system. This is aligned with the ISO 14001 environmental standard that actively monitors and manages environmental impacts. 
Scope	2016	2015	
Scope 1	119,345	115,620	
Scope 2	169,447	181,920	
Scope 3	592,888	642,795	
Total Emissions	881,680	940,334	
Scope 1: This table shows that Scope 1 has increased from 115,620 in 2015 to 119,345 in 2016. Scope 2 has seen a reduction over the same period, going from 181,920 to 169,447. Scope 3 has reduced from 642,795 to 592,888. The total emissions in 2016 were 881,680, down from 940,334 in 2015. 
Australia Post has seen a 6 per cent reduction in total emissions primarily associated with a reduction in electricity, road and air transport as product is moved onto the rail network wherever possible.
Waste management and the circular economy
With our unparalleled network of touch points into Australian businesses and communities, we are perfectly positioned to make it easier for Australians to collect and return items that would otherwise go to landfill. As such we set ourselves a target to responsibly divert 100,000 tonnes of material from landfill, by 2020. 
We continue to transform operational circularity solutions, such as the recycling of truck curtains and tyres into customer circularity solutions, responding to market trends but also through leveraging our own capabilities. In 2015/16, we joined forces with TerraCycle to recycle products from some big brands including Colgate, Garnier, Maybelline, L’Oreal, Nespresso, L’Occitane and Nature’s Own. With initiatives where people can redirect recyclable waste through the postal and parcels network, we are directing products including toothbrushes, cosmetic items and coffee pods for repurposing. These waste products are melted down and the recycled plastic made into plastic lumber, shipping pallets and railway sleepers.
We also continue our long-term partnerships with Planet Ark and MobileMuster, enabling the return of 179,326 printer cartridges and 103,962 mobile phones and accessories.
Reused and recycled – 2015/16
Other Minor or Ad Hoc 	403	
Customer – Reused 	1,486	
Customer – Recycled 	2,553	
Operational – Pallets 	3,840	
Secure Paper Waste 	774	
Operational – Tyres 	679	
Plastic Waste 	281	
Paper Waste 	504	
Information Technology Waste 	35	
Co-mingled Recycled Waste 	120	
Cardboard Waste 	1,857	
This table lists the total recycled tonnes by type: cardboard waste (1,857), co-mingled recycled waste (120), information technology waste (35), paper waste (504), plastic waste (281), operational (tyres) (679, secure paper waste (774), operational (pallets) (3,840), customer recycled (2,553), customer reused (1,486), other/minor/adhoc (403).
Reuse and recycling target – 2015/16
This chart shows the annual volume of recycling by Australia Post in 2016 (12,540) and the anticipated trajectory required to meet the 2020 target of 100,000.
In 2016, Australia Post recycled and reused 12,531 tonnes during the first year of our target from a combination of customer and operational programs.
Australia Post has set a target for 2017 to increase the level of recycling by an additional 1500 tonnes, focusing on textiles and internal reuse programs.
The chart shows the levels of recycling and reuse required to meet our 2020 performance target.
Focusing on our areas of greatest impact
Transport 
Transport is a focus area for environmental improvement and we continue to look for ways to become more efficient and adopt alternative fuels across our transport fleet. We are starting to see great results through a number of new initiatives including our purchase of fuel-efficient vehicles, using an extendable conveyor to “loose load” parcels directly into transport containers on selected routes, improving container storage capacity.
We are also partnering with Renault Australia, to assess Australia’s first fully electrically powered commercial van – the Renault Kangoo Maxi ZE. We expect to halve energy costs, along with the 100 per cent reduction in carbon emissions.
Buildings and facilities 
Energy use in our buildings and facilities accounts for around two-thirds of our carbon emissions. Our employees and contractors are always looking for innovative ways to improve energy efficiency across our network of Post Offices, mail facilities and administrative offices. We conduct a dedicated energy-efficiency audit program and use a research and development fund to trial and evaluate ideas.
As well as identifying and implementing more efficient lighting systems as part of our repair and replacement program, we monitor, measure and influence the impact of our IT infrastructure, including data centres. One of the most effective ways we manage our energy efficiency is by integrating sustainable design principles into our Building Design Standards, to guide our property development and construction activities.
Collaborating to purchase renewable energy
Australia Post is part of a group of organisations looking to drive investment in renewable energy through the Melbourne renewable energy project, using a group purchasing model to buy at large scale. Led by the City of Melbourne, the project includes Australia Post, NAB, the University of Melbourne, RMIT, NEXTDC, Zoos Victoria, the City of Port Phillip, Moreland City Council, the City of Yarra, Citywide, Melbourne Convention and Exhibition Centre and Bank Australia.
Having identified how much renewable energy we are all willing to purchase, we are challenging the market to supply at a cost-effective price. 
If the market responds effectively, we will see a new renewable energy plant constructed within the next two years to supply the group’s energy demands. The group is aiming to purchase more than 110 gigawatt hours of energy, which is enough to power more than 28,000 Melbourne households for a year.
Participation in this innovative energy procurement project is just one of the many ways we are looking to reach our emissions reduction target.
Supporting small businesses
Our partnership with the Banksia Sustainability Awards has continued for many years and we continued to sponsor the Small to Medium Business Sustainability Leadership Award category. This category rewards work done to develop and implement industry-leading environmental and sustainability measures.
In 2015, South Australian small business Kalleske Wines won this award for excellence in sustainability initiatives. Kalleske Wines uses ecologically and socially friendly farming methods, while its use of solar technologies makes it a leading net exporter of electricity in Australia.
Carbon reduction target
	00	2010	2011	2012	2013	2014	2015	2016	2020 target	
CO2e	348,436	360,599	345,548	331,522	321,858	307,153	297,539	288,792	261,327	
This chart shows that our Scope 1 & 2 (GHG emissions) have been in steady decline since 2010 (with the exception of the year 2000), when our tCO2e were 360,599. In 2016, they reached 288,792 tCO2e – a decline of 17 per cent since 2000, leaving us on track to reach our 2020 reduction target of tCO2e 261,327.
Australia Post has achieved a seventeen per cent reduction compared to the 2000 baseline and is on track to achieving the 25% reduction target by 2020.
Our future outlook
We will continue to drive energy efficiency and carbon reduction improvements across our 1,100 properties. 
We will make it easier for our customers to engage with the circular economy through our unmatched assets.

Materiality review
In April and May 2016, we conducted a materiality review with internal and external stakeholders to learn from their views and perceptions of Australia Post’s activities, performance and key issues to inform our annual report content and guide our strategic decisions. 
The materiality review was conducted through one-on-one interviews with key external stakeholders and an online survey to a cross-section of internal stakeholders.
We identified a number of issues that are aligned to the IIRC Integrated Reporting framework’s “Six Capitals”.
•	Financial Capital: Governance and finance 
•	Manufactured Capital: Our customer network
•	Intellectual Capital: Our innovation and expertise
•	Human Capital: Our people
•	Social Capital: Our relations with stakeholders
•	Natural Capital: Our environment
The review of the feedback from our stakeholders and the business across these issues help us identify our key impacts and explain how Australia Post creates value over time. The table below summarises the top 10 issues for Australia Post, external stakeholders and overall.
Australia Post 
Our people (orange)
•	Employee safety
•	Diversity and inclusion
•	Fair labour practices
•	Workforce engagement
•	Employer of choice
•	Workforce digital capability
Our customers, our communities (grey)
•	Customer data security
•	Community relations
Our innovation, our expertise (yellow)
•	New products, services and/or business models
Business performance (blue)
•	Viable parcel business
External stakeholders
Our innovation, our expertise (yellow)
•	Innovate/co-create
•	eCommerce expertise
Our customers, our communities (grey)
•	Customer experience
•	Community relations
•	Digital access
•	Support for the vulnerable
Business performance (blue)
•	Operating profitably
•	Transparency and disclosure
Our customer network (red)
•	Post Office network
Our environment, our responsibilities (green)
•	Greenhouse gas emissions
Overall
Our customers, our communities (grey)
•	Customer experience
•	Community relations
•	Support for the vulnerable
•	Digital access
•	Fair treatment of suppliers
Our innovation, our expertise (yellow)
•	Innovate/co-create
•	eCommerce expertise
Business performance (blue)
•	Operating profitably
•	Transparency and disclosure
Our environment, our responsibilities (green)
•	Greenhouse gas emissions

UN Sustainable Development Goals
Australia Post welcomed the United Nations General Assembly’s 2015 adoption of the Sustainable Development Goals, recognising that they provide a common set of goals to put the world on a sustainable path to 2030 and address its massive economic, social and environmental challenges. 
Australia Post is poised to play a domestic leadership role in advancing the SDGs, negotiated in part by our shareholder, the Australian Government. Achievement of the goals is in direct alignment with our enterprise purpose: To deliver a better future for our people, customers and communities. Everyone, Everywhere, Everyday.
As one of Australia’s largest companies – in terms of employment and presence on roads and in communities nationwide – we’re well placed to raise their profile locally. In the coming years, we will help advance the SDGs through the investments we make, the solutions we develop, and the business practices we adopt. 
The 17 goals are interconnected but some of the SDGs more closely align with Australia Post’s role and operations. 
We have prioritised six SDGs in terms of the current and potential impact that our business operations have on them. We will reassess these priorities on an ongoing basis: 
Goal 5 Gender Equality – Achieve gender equality and empower all women and girls.
Goal 8 Decent Work and Economic Growth – Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Goal 9 Industry, Innovation and Infrastructure – Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.
Goal 11 Sustainable Cities and Communities – Make cities and human settlements inclusive, safe, resilient and sustainable.
Goal 12 Responsible Consumption and Production – Ensure sustainable consumption and production patterns.
Goal 13 Climate Action – Take urgent action to combat climate change and its impacts.

Assurance statement

Corporate GovernanceStatement 2016

This statement has been approved by the Board and is current as at 25 August 2016.
Australia Post’s approach to corporate governance
Australia Post maintains a comprehensive system of corporate governance practices designed to provide appropriate levels of disclosure and accountability.
These practices derive principally from the provisions of the Australian Postal Corporation (APC) Act 1989, the Public Governance, Performance and Accountability (PGPA) Act 2013, and the Commonwealth Government Business Enterprise (GBE) Governance and Oversight Guidelines (2015). Our governance framework is also guided by the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations – 3rd Edition”.
PRINCIPLE 1: Lay solid foundations for management and oversight
(based on ASX Principle 1)
Recommendation 1.1: Corporations should establish the functions reserved to the Board and those delegated to the Executive Team.
Role of the Australia Post Board (“the Board”)
The Board is responsible for the governance of Australia Post. The role of the Board is to decide the objectives, strategies and policies to be followed by Australia Post and ensure that Australia Post performs its functions in a manner that is proper, efficient and, as far as practicable, consistent with sound commercial practice. The Board derives its authority from section 23 of the APC Act.
In discharging those broadly defined roles, the Board’s primary tasks include, amongst others:
•	reviewing and approving Australia Post’s corporate plan;
•	selecting, appointing and monitoring of the performance of the Managing Director & Group CEO and if appropriate, terminating the appointment of the Managing Director & Group CEO;
•	approving and monitoring key corporate policies, including policies in relation to financial matters and risk management;
•	monitoring financial outcomes and the integrity of reporting, and in particular, approving annual budgets and longer-term strategic and business plans;
•	approving decisions affecting Australia Post’s capital, including approval of major new business initiatives and declaring dividends;
•	meeting its accountability to Government by: submitting corporate plans, evaluating and recommending dividend proposals, reporting on business and operational performance, preparing an annual report, by notifying significant business proposals by ensuring compliance with notified Government policies and ensuring proper accounting and enterprise risk management and oversight.
The Board has established three Committees: 
•	Nomination and Remuneration Committee (see Principle 2 and Principle 8);
•	Audit and Risk Committee (see Principle 4); and
•	People, Safety and Culture Committee (see Principle 8).
Timetables for Board and Committee meetings are agreed annually in advance.
Delegation to the Managing Director & Group CEO and the Executive Team
Sections 18 & 19 of the APC Act specify a wide number of postal, postal-related and other powers of Australia Post. These powers reside in the Managing Director and may be delegated by him to other employees of Australia Post under Section 93.
Under Section 94 of the APC Act, the Board may delegate virtually all or any of its powers to a Director of the corporation.
The Board has delegated to the Managing Director & Group CEO responsibility for implementing Australia Post’s strategic priorities and for managing Australia Post’s day-to-day operations. Specific limits on the authority delegated to the Managing Director & Group CEO are set out in the Delegated Authorities approved by the Board.
The Executive Team comprises the CEO and senior managers (Executives) who are accountable to the CEO. Specific limits on the authority delegated to the Executive Team are set out in the Delegated Authorities approved by the Managing Director & Group CEO.
Recommendation 1.2: Corporations should carry out appropriate checks of Board candidates and provide information to shareholders that is material to their candidacy.
Non-executive directors are appointed by the Governor-General on the nomination of the portfolio Minister for a period of up to five years. Reappointment is permissible. In practice, terms of appointment are generally three years.
The Minister must consult with the Chairman before nominating a person for appointment as a director. To nominate a person for appointment as a director, the Minister must have regard to the need to ensure that the directors collectively possess an appropriate balance of skills and experiences aligned to the corporation’s strategic priorities.
The Managing Director & Group CEO is appointed by the Board.
Recommendation 1.3: Corporations should have a written agreement with each director and Executive setting out the terms of their appointment.
New directors consent to act as a director and receive a formal letter of appointment from Shareholder Ministers which sets out duties and responsibilities, rights, and remuneration entitlements. 
The Managing Director & Group CEO and each Executive are employed under individual contracts of employment which sets out the terms on which they are employed including details of their duties and responsibilities, rights and remuneration entitlements. The contract of employment sets out the circumstances in which the Executive may be terminated by either Australia Post or the Executive, including details of notice periods and amounts payable to the Executive as a consequence of the termination by Australia Post of the Executive’s employment.
Continuation of employment is subject to ongoing performance reviews by the Board and the Managing Director & Group CEO. Where the Board terminates the Managing Director & Group CEO or endorses the termination of other senior executives’ employment for reasons other than performance or misconduct, the individuals are entitled, in the case of the Managing Director & Group CEO, to:
•	12 months’ notice in writing or payment of 12 months’ Salary and Allowances in lieu of notice or a combination of both notice in writing and payment in lieu of notice;
and, for other senior executives, to:
•	90 days payment in lieu of notice and a termination payment calculated based on length of service and capped at 12 months fixed annual remuneration including the payment in lieu of notice. 
Recommendation 1.4: The corporate secretary should be accountable directly to the Chair of the Board for matters relevant to the Board.
Australia Post’s Corporate Secretary fulfils other management responsibilities in addition to corporate secretarial duties. The formal reporting line of the Corporate Secretary is to the Executive General Manager, Group Services. For any matter relevant to the corporate secretarial duties or conduct of the Board, the Corporate Secretary has an indirect reporting line, and is accountable, to the Chair of the Board.
Recommendation 1.5: Corporations should have a policy concerning diversity and disclose that policy, together with measurable objectives for achieving gender diversity and its progress towards achieving those objectives.
Australia Post is committed to achieving a respectful and inclusive workplace that values diversity. Our Diversity and Inclusion Strategy aims to promote improved diversity outcomes to foster a workplace culture that ensures equal employment opportunities (EEO) for all. Managing diversity in Australia Post is a corporate objective and responsibility is vested in the Board, our Executive Committee, managers and employees.
Diversity in the workplace encompasses understanding, acceptance and respect for individual difference including ethnicity, gender, sexual orientation, age, disability, family status, religious beliefs, perspective, experience or other ideologies.
We recognise that maximising our people’s skills and commitment better positions Australia Post to meet our business purpose and future challenges. Developing and managing an increasingly diverse workforce means recognising, respecting and leveraging individual differences and contributions in the workplace. It requires the implementation of practices that maximise respect for all individuals and which recognise the value that diversity brings to Australia Post.
While we define diversity in the broadest-possible sense, we formally measure and track our progress against five key areas: gender, Aboriginal & Torres Strait Islander people, people from culturally and linguistically diverse backgrounds, people with disability and Lesbian, Gay, Bi-sexual, Trans and Intersex (LGBTI). This year we launched our first Gender Action Plan, which outlines our commitment to improving gender equality, both within Australia Post and throughout the communities we serve. 
Performance against each of our five focus areas is disclosed in Australia Post’s Diversity and Inclusion annual report, which is prepared in compliance with the Equal Employment Opportunity (Commonwealth Authorities) Act 1987 and presented to the Minister for Communications. The report is published on our website at auspost.com.au. Performance for 2015/16 was:
Authority for disclosure	Australia Post	Australia Post	Australia Post Group*	
	2015	2016	2016	
Aboriginal & Torres Strait Islander Representation	1.9%	2.1%	1.8%	
Culturally & Linguistically Diverse	25.5%	25.3%	22.5%	
People with Disability	6.3%	6.0%	5.3%	
LGBTI	0.8%	0.9%	0.9%	
Female representation	38.7%	38.7% 	36.4%	
Female Executive Committee members	37.5%	 N/A	33.3%	
Female Bands 1-4	33.3%	35.4%	N/A	
Women in Management	35.5%	36.1%	N/A	
Female Postal Manager	50.9%	 51.0%	N/A	
Female Facility Manager	30.8%	 27.9%	N/A	
Female Delivery Manager	15.9%	14.4%	N/A	
* Australia Post has commenced the process of collecting diversity information from our subsidiary companies; however, a large proportion of these employees are yet to complete a diversity profile. Encouraging these employees to share their diversity profile will be a focus for FY17 and as such we expect our Australia Post Group diversity statistics to increase. 
Recommendation 1.6: Corporations should disclose the process for evaluating the performance of the Board, its committees and individual directors.
Evaluation of Board and individual directors
The Board regularly reviews its own performance and the performance of individual directors. The most recent review, which was conducted during the year, was facilitated by an independent consultant with expertise in conducting Board reviews. The results of the review were discussed at a subsequent Board meeting. The Chairman met separately with each director to provide feedback from the review in relation to the director’s contribution to the Board. The Board agreed to accept the Board evaluation report and implement ongoing improvements, as part of its ongoing development and learning.
An independent review of the performance of the Board is conducted every two years.
Evaluation of Board Committees
Audit and Risk Committee
Review process
The Committee undertakes an annual self-assessment of its performance against the requirements of the Charter.
The Committee provides an annual report to the Board on the operation and performance of the Committee.
The Committee was satisfied that it had been effective in performing its responsibilities under its Charter.
People, Safety and Culture Committee
Review process
The Committee undertakes an annual self-assessment of its performance against the requirements of the Charter.
The Committee was satisfied that it had been effective in performing its responsibilities under its Charter.
Nomination & Remuneration Committee
Review process
The Committee regularly informs the Board about Committee activities and makes recommendations to the Board on matters relevant to the Committee’s purpose.
The Committee was satisfied that it had been effective in performing its responsibilities under its Charter.
Recommendation 1.7: Corporations should disclose the process for evaluating the performance of the Executive Team.
Executive team performance evaluations have been conducted for the year ended 30 June 2016.
Performance evaluations are based on an assessment of performance against key business objectives set annually. The measures include safety, financial, strategy & execution, customer satisfaction, employee engagement and other individual metrics that support the key business objectives.
PRINCIPLE 2: 
Structure the Board to add value
(based on ASX Principle 2)
The APC Act provides that the Board of Australia Post comprises up to nine directors, including the chairperson, the deputy chairperson, the managing director and not more than six other directors.
The directors of Australia Post at any time during the financial year are listed with a brief description of their qualifications, appointment date and experience on pages 8 and 9 of the annual report.
The Board met eight times during the financial year. Directors’ attendances are set out on page 63 of the annual report.
Recommendation 2.1: The Board should establish an appropriately structured nomination committee.
The Board has established a Nomination and Remuneration Committee. The Committee currently comprises all non-executive directors.
The Committee has a formal Charter that is required to be reviewed at least annually. The Charter was most recently reviewed in August 2015. A copy of the Charter is available on Australia Post’s website.
The Committee is responsible for:
•	providing Shareholder Ministers with a recommendation on Board composition and membership;
•	developing an annual Board Plan;
•	undertaking a Board effectiveness review approximately every two years;
•	informing Shareholder Ministers prior to a vacancy on the Board or in the role of the Managing Director & Group CEO;
•	ensuring that Australia Post’s performance, remuneration, and succession practices for the Managing Director & Group CEO are coherent, fair and reasonable and are consistent with applicable provisions regarding remuneration and disclosure;
•	reviewing and making recommendations to the Board regarding remuneration levels for the Managing Director & Group CEO;
•	reviewing and making recommendations to the Board regarding corporate goals, objectives and short and long-term incentive programs relevant for the Managing Director & Group CEO; 
•	assessing the performance of the Managing Director & Group CEO in light of objectives determined; 
•	ensuring that the recommendations in relation to the Managing Director & Group CEO’s Key Performance Indicators (KPIs) encourage behaviour consistent with the organisation’s Shared Values and support Australia Post’s long-term financial soundness, growth and success within an appropriate risk management framework; 
•	establishing and maintaining appropriate succession arrangements for the Managing Director & Group CEO; 
•	considering the Managing Director & Group CEO’s recommendations around recruitment, performance, remuneration (both short and long-term incentives) and succession arrangements for executive general managers and the Management Committee; and 
•	reviewing policies to ensure alignment with the duties set out in the Public Governance, Performance and Accountability Act 2013.
The Committee met five times during the year.
Details of directors’ attendances are set out on page 63 of the annual report.
Recommendation 2.2: The Board should establish and disclose a Board skills matrix on the mix of skills and diversity for Board membership.
Australia Post seeks to maintain a Board of Directors with a broad range of financial and other skills, experience and knowledge relevant to overseeing the business of a global eCommerce organisation.
During the year, the external Board Performance Review identified that, collectively, new appointees should have strong skillsets and:
•	should be strategic thinkers capable of insightful constructive questioning and critical judgement;
•	should have considerable non-executive director experience;
•	should address the skills of eCommerce and digital business models, internationalisation and customer centricity; and
•	recommendations to government by the Chair should strongly focus on proven individuals with a combination of skills mapped to the Part of Tomorrow strategy.
Diversity of the Board, including through gender, age, ethnicity or geography, is a consideration for new appointees.
Recommendation 2.3: The corporation should disclose whether its directors are independent.
Australia Post considers a director to be independent if the director is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, his or her capacity to bring an independent judgement to bear on issues before the Board and to act in the best interests of the entity and its shareholders generally.
In determining whether a director is independent, the Board has considered whether the director:
•	is, or has been, employed in an executive capacity by Australia Post or any of its subsidiaries and there has not been a period of at least three years between ceasing such employment and serving on the Board;
•	is, or has within the last three years, been a partner, director or senior employee of a provider of material professional services to the entity or any of its child entities;
•	is, or has been within the last three years, in a material business relationship (for example, as a supplier or customer) with Australia Post or any of its subsidiaries, or an officer of, or otherwise associated with, someone with such a relationship;
•	has a material contractual relationship with Australia Post or its subsidiaries other than as a director;
•	has close family ties with any person who falls within any of the categories described above; or
•	has been a director of Australia Post for such a period that his or her independence may have been compromised.
The Board has determined that each non-executive director is, and was throughout the entirety of the financial year, independent.
During the financial year, there were four instances where an individual director found it necessary to be excused from consideration by the Board of a specific matter because of a potential conflict of interest.
No director has received or become entitled to receive a benefit because of a contract between any company in the Australia Post Group and the director, or a firm of which the director is a substantial member, or an entity in of which the director has a substantial financial interest, other than:
•	in the case of non-executive directors, remuneration as disclosed in the annual report;
•	in the case of the Group CEO, a contract of employment and entitlements under Australia Post’s Long-Term Incentive Plan.
Directors have unfettered access to Australia Post records and information reasonably necessary to fulfil their responsibilities. Directors also have access to the Corporate Secretary on any matter relevant to their role as director. In addition, the Board has access through the Corporate Secretary to other relevant senior executives to seek additional information concerning Australia Post’s business.
Provided they have prior agreement from the Chairman, directors have the right to seek independent professional advice at Australia Post’s expense to help them carry out their responsibilities.
It is usual for the non-executive directors to confer, without management being present, at the start of each scheduled Board meeting.
Recommendation 2.4: The majority of the Board should comprise of independent directors.
As at 30 June 2016, the Board comprised eight non-executive directors and one executive director. The executive director is Australia Post’s Group CEO, Ahmed Fahour. The Board has determined that each non-executive director is, and was throughout the entirety of the financial year, independent.
Recommendation 2.5: The Chair should be an independent director.
Under the APC Act, the Chairman is appointed by the Governor-General on the nomination of the portfolio Minister. 
The Board is satisfied that Australia Post’s Chairman, John Stanhope, is, and was throughout the entirety of the financial year, independent.
The Chairman presides over Australia Post’s Board meetings. The Chairman is responsible for:
•	leading the Board in reviewing and discussing Board matters;
•	managing the efficient organisation and conduct of the Board’s function;
•	briefing all directors in relation to issues arising at Board meetings;
•	facilitating effective contribution by all directors and monitoring Board performance;
•	overseeing that the membership of the Board is skilled and appropriate for Australia Post’s needs and reporting this to Shareholder Ministers;
•	promoting constructive relations between Board members and between the Board and management;
•	reviewing corporate governance matters with the Corporate Secretary and reporting on those matters to the Board; and
•	overseeing the implementation of policies and systems for Board performance review and renewal.
Recommendation 2.6: Establish a program for inducting new directors and provide appropriate professional development opportunities for directors.
Under the APC Act, the Chairman is appointed by the Governor-General on the nomination of the portfolio Minister. 
Directors receive a formal letter of appointment from Shareholder Ministers. An induction pack is provided to directors by Australia Post and contains sufficient information to allow the new director to gain an understanding of:
•	the Ministerial powers granted to the portfolio Minister;
•	the rights, duties and responsibilities of directors;
•	the role of Board Committees;
•	the roles and responsibilities of the Executive Team; and
•	Australia Post’s financial, strategic, and operational risk management position.
New directors undertake an induction program which comprises:
•	an electronic information pack which includes a copy of Australia Post’s Governance Framework; Commonwealth Government Business Enterprise Governance and Oversight Guidelines; Australia Postal Corporation Act 1989; Public, Governance, Performance and Accountability Act 2013; the most recent Corporate Plan; the most recent annual report; our organisational chart; Insurance and Indemnity details pertaining to Australia Post’s Directors and Officers Insurance policy and tier 1 policies;
•	a program of meetings with Australia Post’s Chairman, Managing Director & Group CEO, members of the Executive Committee and the Corporate Secretary; and
•	visits to Australia Post’s main operational sites.
PRINCIPLE 3: 
Act ethically and responsibly
(based on ASX Principle 3)
Recommendation 3.1: Corporations should establish a Code of Conduct.
Australia Post has a Code of Conduct referred to as “Our Ethics” that applies to Australia Post and its directors, employees and contractors (all of whom are referred to as “The Australia Post Group” in Our Ethics).
Our Ethics sets out a number of overarching principles of ethical standards which are set out under the following headings:
•	Health, safety and work environment;
•	Compliance with laws and regulations;
•	Conflicts of interest;
•	Environmental sustainability;
•	Use of corporate property;
•	Corporate records; and
•	Privacy and confidentiality.
Our Ethics is underpinned by Australia Post’s shared values: Being Safe Everywhere, Helping Each Other, Respecting Everyone, Improving Everyday and Delighting our Customers.
Our Ethics provides a mechanism to enable members of the Australia Post Group to report actual or suspected breaches, including an independently operated Whistleblower Hotline service to allow for anonymous reporting. The Whisteblower Hotline also services the requirements of the Public Interest Disclosure Act 2013.
Australia Post’s Our Ethics is available on Australia Post’s website.
PRINCIPLE 4: 
Safeguard integrity in corporate reporting
(based on ASX Principle 4)
Recommendation 4.1: The Board should establish an appropriately structured audit committee.
The Board has established an Audit and Risk Committee. Its primary function is to assist the Board through its oversight and review of financial reporting, performance reporting, system of risk oversight and management, system of internal control and auditor independence and performance.
Structure of the Audit and Risk Committee
Under its Charter, the Audit and Risk Committee must have a minimum of three members, all of whom must be non-executive directors and the majority of whom are independent. However, the Chair of the Board is not to be a member of the Committee in accordance with the PGPA Act. The Charter also requires all members to be financially literate, with at least one possessing accounting or related financial qualifications and experience.
The Committee currently comprises five members – Brendan Fleiter (Chair), Michael Byrne, Holly Kramer, Bruce McIver and Jan West. Other non-executive directors may attend meetings. Details of the qualifications and experience of all Committee members are disclosed on pages 14–16 of the annual report.
The Managing Director & Group CEO, Group Chief Financial Officer, Chief Risk Officer, Group Financial Controller, Internal Auditor, external auditor and other management representatives may attend meetings at the discretion of the Committee. The Committee meets privately with the external auditor on general matters concerning external audit and other related matters, including the half-year and full-year financial reports. The Committee also meets privately with the internal auditor, Group Chief Financial Officer and Chief Risk Officer. 
The Corporate Secretary is the secretary to the Committee. Copies of the minutes of a meeting of the Committee are distributed to the Board for discussion at the next Committee meeting. The Chairman of the Committee reports to the Board on the Committee’s conclusions and recommendations.
The Committee met four times during the year. Details of directors’ attendances are set out on page 83–84 of the annual report.
Charter of the Audit and Risk Committee
The Committee operates under a formal Charter published on Australia Post’s website. The Charter is required to be reviewed by the Committee annually. The Charter was most recently reviewed and updated in August 2015 and is available on Australia Post’s website.
The Charter sets out the roles and responsibilities, composition, structure and membership requirements of the Committee.
The Committee’s primary responsibilities include oversight and review of:
•	financial reporting;
•	performance reporting;
•	system of risk oversight and management;
•	system of internal control; and
•	auditor independence and performance.
Monitoring performance of the external auditor
Under section 43 of the PGPA Act, the Auditor-General is responsible for auditing the financial reports of Australia Post and its subsidiaries. The Auditor-General is also responsible for auditing compliance with the performance standards prescribed for Australia Post under section 28C of the APC Act. Ernst & Young (E&Y) has been retained by the Australian National Audit Office to assist in both of these assignments.
The Board has in place a comprehensive set of audit independence principles in relation to the external auditors. Among other things, these principles exclude the engagement of the external auditors for the provision of certain non-statutory audit-related services, such as internal auditing, taxation planning, treasury policy and operations, and business and strategic planning. In addition, the senior audit partner on the corporation’s account must be rotated at least every five years. However, under circumstances where the involvement of key personnel in the audit of the corporation does not constitute a familiarity threat, the Australian National Audit Office (ANAO) may extend the rotation of the senior audit partner to a maximum of seven years.
The Audit and Risk Committee together with ANAO, monitor the ongoing non-statutory audit-related services provided by E&Y.
Recommendation 4.2: CEO and CFO certification of financial statements.
Prior to the adoption of the financial reports, the Board received and considered a written statement from the Managing Director & Group CEO and Group Chief Financial Officer to the effect that: 
•	the financial records of the corporation and the consolidated entity have been properly maintained;
•	the statements comply with accounting standards and any other requirements prescribed by the Public Governance, Performance and Accountability Act 2013 and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 and present fairly the entity’s financial position, financial performance and cash flows; and
•	integrity to the financial statements is founded on a sound system of risk management and internal control which is operating effectively.
Recommendation 4.3: External auditor availability at AGM.
There is no requirement for Australia Post to hold an AGM. 
Under section 43 of the PGPA Act, the Auditor-General is responsible for auditing the financial reports of Australia Post and its subsidiaries. The Auditor-General makes themselves available at the request of the shareholder.
PRINCIPLE 5: 
Make timely and balanced disclosure
(based on ASX Principle 5)
Recommendation 5.1: Corporations should establish disclosure policies and ensure compliance with those policies.
Australia Post’s disclosure obligations are prescribed from the provisions of the APC Act, the PGPA Act, and the GBE Guidelines (2015). 
Australia Post is accountable to its Shareholder Ministers for its performance. Disclosure of performance, expenditure and any significant issues is made to our Shareholder Ministers in a timely and balanced manner. This is executed through quarterly progress reports, the annual report and regular website updates. This is in addition to responding to requests from Shareholder Departments on a regular basis.
PRINCIPLE 6: 
Respect the rights of shareholders
(based on ASX Principle 6)
Recommendation 6.1: The corporation should provide information about itself and its governance to its shareholder on its website.
Australia Post’s website at www.auspost.com.au provides detailed information about its business and operations. Details of Australia Post’s Board members and Executive Team are included on the website.
The About us link on Australia Post’s website provides helpful information to the shareholder. It allows the shareholder to view all media releases since at least September 2012; various speeches provided by the Managing Director & Group CEO, a copy of the most recent annual report and annual reports for at least the eight previous financial years.
Australia Post also publishes an annual Diversity and Inclusion annual report setting out the details of its achievements against a range of diversity programs focused on building our female talent pipeline, improving employment opportunities for Aboriginal and Torres Strait Islander Australians, celebrating our cultural diversity, and building awareness about people with disability. Australia Post’s most recent Diversity and Inclusion annual report can be found on its website.
The shareholder can find information about Australia Post’s corporate governance on its website at http://auspost.com.au/about-us/corporate-governance.html. This includes Australia Post’s Board Committee Charters.
The following documents are published on the Australia Post website under About us:
•	Corporate Governance Statement; 
•	Audit and Risk Committee Charter;
•	People, Safety and Culture Committee Charter;
•	Nomination and Remuneration Committee Charter;
•	Customer Service Charter;
•	Community Participation Commitment;
•	Corporate Responsibility Policy;
•	Environmental Policy;
•	Our Ethics.
Recommendation 6.2: The corporation should design and implement a shareholder relations program to facilitate two-way communication with its shareholder.
Although Australia Post has not established a formal shareholder communications policy, it does take appropriate measures to keep its shareholder informed about its activities and to listen to issues or concerns raised by its shareholder. 
Recommendation 6.3: The corporation should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of shareholders.
Although Australia Post has not established a formal shareholder participation policy, it does follow the obligations as set out in the PGPA Act and GBE Guidelines with regards to shareholder meetings.
Engagement with shareholders occurs during fortnightly teleconferences, quarterly face-to-face meetings, meetings upon request and responses to any enquiries made from time to time.
Recommendation 6.4: The corporation should provide the option to send and receive communications from the corporation in electronic form.
Australia Post communicates with its shareholder via a number of different communications channels, which include digital and physical methods.
PRINCIPLE 7: 
Recognise and manage risk
(based on ASX Principle 7)
Recommendation 7.1: Corporations should establish an appropriately structured risk management committee for the oversight of material business risks.
The Board has established an Audit and Risk Committee. Its responsibilities include oversight of the effectiveness of Australia Post’s system of risk management and internal control.
The Committee receives regular presentations on Australia Post’s material business risks and the controls in place to mitigate the consequences of those risks. Australia Post’s main risks are reviewed at each meeting of the Committee and annually by the Board. The Committee also receives regular presentations from management throughout the year on specific risk topics. The Committee has responsibility for approving the internal audit plan.
Details of the structure and Charter of the Audit and Risk Committee are set out in Recommendation 4.1.
Recommendation 7.2: The Board or a Committee of the Board should review the company’s risk framework at least annually to satisfy itself that it continues to be sound.
Risk Management Policies
Australia Post has a Group Risk Management Policy and supporting Group Risk Management Framework, which collectively describes the principles, strategies, processes and core components that are in place for supporting the organisation in effectively managing risk. The Policy & Framework are enterprise-wide documents and have been developed utilising the principles as detailed in the International Standards for Risk Management (ISO 31000:2009) & Compliance Management Systems (ISO 19600:2014 ); and the ASX Corporate Governance Principles (Principle 7 – Recognise and manage risk). 
Australia Post has a number of other policies that directly or indirectly serve to reduce and/or manage risk. These include, but are not limited to:
•	Our Ethics
•	Group Policy & Supporting Documents Lifecycle Governance Policy
•	Group Work, Health & Safety Policy
•	Group Information Security Policy
•	Group Treasury Policy
•	Group Fraud & Corruption Policy
•	Group Risk Management Policy
•	Group Delegations Policy
•	Group Privacy Policy
•	Group Corporate Responsibility Policy
•	Group Chain of Responsibility Policy
•	Group Customer Data & Use Policy
•	Group Business Continuity Management
•	Group Incident Management Policy
Roles and responsibilities
The Group Risk Management Policy, and the other policies listed above, describe the roles and responsibilities for managing risk. This includes appropriate details of responsibilities allocated to the Board or to the Audit and Risk Committee (Committee), Executives, the business units, Enterprise Risk & Compliance and Australia Post’s internal audit function.
Board
The Board is responsible for ensuring that established processes, practices and adequate resources are in place to effectively manage all risks associated with Australia Post’s operations. The Board oversees a comprehensive risk management program covering all potentially significant business risks, strategic objectives and risk appetite considerations. The Audit and Risk Committee assists the Board in carrying out these responsibilities. The Board annually reviews and approves the Board Risk Appetite Statement. The Board also conducts an annual review of the corporation’s risk policy and supporting framework to maintain its effectiveness and adequacy.
Committee
Details of the operation of the Committee are included in the commentary on Principle 4. The Committee oversees the detailed analysis of the effectiveness of the system of risk management and internal control. At each of its meetings the Committee receives a report providing an update on matters affecting Australia Post’s main risk exposures and progress toward mitigating the consequences of those risks. The Committee also receives regular presentations from management throughout the year on specific risk topics. Annually, the Committee reviews the Board Risk Appetite Statement (that provides overarching principles of the level of risk that Australia Post is willing to accept in the pursuit of its objectives) before it is presented to the Board for approval.
Executive Committee
The Executive Committee comprises senior Executive Management and assists the Committee and Board with the review, oversight and clearance of all committee papers.
Enterprise Portfolio Forum
The Enterprise Portfolio Forum comprises senior Executive Management and is established among other activities to assist management in discharging their responsibilities, particularly in relation to risk management and internal control.
Business Units
In addition to the forums noted that currently meet on a regular basis, risk governance mechanisms are in place at a business unit level, to fully embed and support the effective and efficient management of risk.
Australia Post’s business units are responsible for maintaining a risk profile detailing their material business risks, associated controls and mitigation strategies. Business management is responsible for the preparation, presentation and integrity of information and all matters about which the Enterprise Portfolio Forum should be informed. Management is also responsible for implementing and maintaining appropriate risk management principles and policies, internal controls and processes designed to identify and address unacceptable risk as determined by the Enterprise Portfolio Forum.
The Chief Risk Officer as part of the Risk Assurance model has dedicated resources embedded in the business to support the transition and operationalisation of the Risk Management Frameworks.
Enterprise Risk & Compliance
Enterprise Risk & Compliance supports the Chief Risk Officer in the development, implementation and maintenance of the Risk Management Frameworks and is accountable for setting the minimum risk and compliance standards and the reporting and oversight of the details of material business risks and risk controls to the appropriate committees and forums.
Internal Audit
Internal Audit provides independent assurance to the Board of our internal processes and controls, that is, the effectiveness and efficiency of the risk, control and governance processes.
External Review
Independent external reviews of risk management are undertaken every four years to ensure better practice is maintained. The most recent such review was undertaken by PwC and presented to the Audit and Risk Committee in February 2014.
Recommendation 7.3: Corporations should disclose the structure and role of its internal audit function.
Australia Post’s internal audit function provides assurance to the Audit and Risk Committee on the effectiveness of Australia Post’s risk management framework and on the adequacy and effectiveness of the system of internal controls.
Internal Audit is an independent, objective assurance and consulting function designed to add value and improve the organisation’s operations including the internal control environment. It assists the organisation to accomplish its objectives by bringing a systematic, disciplined, third line of defence to the evaluation of internal processes and controls, and improve the effectiveness and efficiency of the risk, control and governance processes.
The Audit and Risk Committee participates in the appointment, dismissal or replacement of the General Manager Internal Audit. Selection, promotion, performance assessment and professional development of Internal Audit staff are the responsibilities of the General Manager Internal Audit in consultation with the Chief Risk Officer.
Recommendation 7.4: Corporations should disclose their economic, environmental and social sustainability risks and how those risks are managed.
Corporate responsibility
In 2016, Australia Post revised its approach to corporate responsibility. Our new corporate responsibility plan will help us stay connected to our purpose of helping our people, customers and community deliver a better future. 
We are committed to contributing to Australia’s sustainable development while improving the quality of life of our workforce as well as of the Australian community. Our Corporate Responsibility plan is to transform our business for the digital world and to connect Australians physically and digitally, while minimising our environmental impact. Specifically, this includes: 
•	helping our stakeholders transition to a future in eCommerce: This means maintaining trusted and valued relationships with our stakeholders through change; 
•	increasing participation in a digital world: This will involve providing Australians with access to everyday services delivered both physically and digitally, while simultaneously building the knowledge, skills and confidence of Australians to proposer in a digital world; and 
•	becoming a leading sustainable organisation: We will manage the economic, social and environmental impacts of our business operations, and work alongside our stakeholders to create greater, and new forms, of business, social and environmental value. 
We will advance this agenda through a broad range of programs related to four key areas: our people, customers, the community and the environment. This will involve continually identifying, actively addressing and monitoring any sustainability risks that may relate to these areas. We will continue to maintain conservative posture for any Governance, Safety and Corporate Responsibility risks.
The Corporate Responsibility Policy that underpins this approach, updated in 2015, provides for clear accountability in meeting the program’s goals and objectives. The policy’s key objectives are to:
•	be a purpose and values-led organisation that is open and accountable to the Australian community and our shareholder;
•	give meaningful consideration to societal and environmental impacts of our organisation and how we can create “shared value”;
•	build strong and enduring relationships with our people, customers, community and shareholder; and
•	drive inclusion, prosperity and self-reliance of Australian communities.
Our corporate responsibility performance is reported periodically to management as well as the Board and the Australia Post Stakeholder Council. Reporting on sustainability/non-financial data occurs annually through the annual report, which is being expanded this year to reflect the two leading sustainability frameworks: the Global Reporting Initiative and Integrated Reporting, as outlined by the International Integrated Reporting Council.
Corporate responsibility is embedded and integrated across the corporation through key business focus groups. Our workforce needs and subsequent programs are governed by the Human Resources Committee. The Australia Post Stakeholder Council, which provides an external perspective to the Corporate Responsibility program, comprises representatives ranging from small, medium and large business, direct marketing, corporate responsibility and senior Australia Post executives.
Responsible and sustainable sourcing
Australia Post conducts its business with integrity and ensures compliance with all relevant laws, regulations, policies and procedures. Our Ethics clearly defines the standards of behaviour expected from our employees and business partners to operate ethically and with integrity when purchasing goods and services, and working with suppliers.
Australia Post’s Supplier Code of Conduct specifies that social and environmental outcomes are considered when choosing suppliers. Under the code, suppliers are expected to demonstrate a commitment and compliance to human rights, fair employment practices and environmental responsibility in accordance with existing international standards, such as the United Nations Universal Declaration of Human Rights, the International Labour Organization Declaration on Fundamental Rights at Work, and the United Nation’s Convention on the Rights of the Child and Industry norms. 
Australia Post actively manages risk and compliance of its value chain, striving for transparency and measurable performance.
Our commitment to environment sustainability, requires all suppliers to comply with all applicable environmental laws and regulations, conduct their business in a manner that protects the environment and have an environmental management program that takes responsibility for goods and services throughout their lifecycle to minimise the impact of activities on the environment.
Details of Australia Post’s corporate responsibility strategy can be found on page 9 of the annual report.
PRINCIPLE 8: 
Remunerate fairly and responsibly
(based on ASX Principle 8)
Recommendation 8.1: The Board should establish an appropriately structured remuneration committee.
The Board has established a Nomination and Remuneration Committee. Its responsibilities include reviewing and making recommendations to the Board regarding remuneration levels for the Managing Director & Group CEO and considering the Managing Director & Group CEO’s recommendations around recruitment, performance, remuneration (both short and long-term incentives) and succession arrangements for Executive General Managers and the Management Committee.
Details of the structure and Charter of the Nomination and Remuneration Committee are set out in Recommendation 2.1.
In addition, the Board has established a People, Safety and Culture Committee. The Committee has adopted a formal Charter that is required to be reviewed annually. The most recent review was in December 2015. A copy of the Charter is available on Australia Post’s website.
The Committee considers and makes recommendations to the Board, as appropriate, about:
•	workplace safety, health and wellbeing;
•	culture and enterprise engagement;
•	organisational structure;
•	recruitment, selection and retention;
•	workplace and industrial relations, including the renegotiation of the Enterprise Bargaining Agreement (EBA) and/or terms and conditions of employment; and
•	learning and development.
The Committee met four times during the year.
Details of directors’ attendances are set out on page 83–84 of the annual report.
Recommendation 8.2: The corporation should distinguish between non-executive directors’ remuneration and that of executive directors and Executives.
Remuneration for Australia Post’s non-executive directors is determined by the Commonwealth Remuneration Tribunal. As at 1 January 2016 this was:
Chairman	$182,520	
Deputy chairman	$101,860	
Directors	$92,290	
Audit and Risk Committee chairman	$21,120	
Audit and Risk Committee member	$10,560	
People, Safety and Culture Committee chairman**	$18,000	
People, Safety and Culture Committee member**	$9,000	
** Effective 3 May 2016
The Board is responsible for setting the remuneration arrangements for the Managing Director & Group CEO.
Remuneration arrangements for other senior executives are reviewed and determined by the Nomination and Remuneration Committee based on recommendations by the Managing Director & Group CEO. 
Advice is sought annually from independent specialised remuneration consultants on the:
•	structure of remuneration packages applying in the external market; and
•	quantum of increases that have occurred in comparable Australian corporations over the previous 12 months.
On the basis of this advice, the Managing Director & Group CEO ensures that payments to senior executives are in line with market practice, and that they are competitively placed to attract and retain the necessary talent for the work required by these roles.
Incentive rewards payable to the Managing Director & Group CEO and other senior executives for meeting or exceeding specific key annual business objectives are linked to the annual business planning process at a corporate and individual level. Measures and targeted achievement levels are monitored and reviewed annually to reflect changes in the business priorities for the forthcoming year. The measures include safety, financial, strategy and execution, customer satisfaction, employee engagement and other individual metrics that support the key business objectives. 
Before a reward is payable, a threshold must be reached, according to predefined measures. In the case of the Managing Director & Group CEO and some senior executives, part of their incentive payment is deferred and expensed over the deferral period.
Remuneration details for the Managing Director & Group CEO and other senior executives are provided in Note C2 to the financial reports.
Recommendation 8.3: The corporation should establish a policy on whether participants in equity-based remuneration schemes are able to enter into transactions which limit the economic risk of participating in those schemes.
There are no employees in equity-based remuneration schemes.
Directors’ attendance at meetings – 2015/16 
	Board	Audit & Risk Committee	People, Safety& CultureCommittee	Nomination & Remuneration Committee	
	(a)	(b)	(a)	(b)	(a)	(b)	(a)	(b)	
John Stanhope AM	8	8	–	–	–	–	5	5	
Ahmed Fahour	8	8	–	–	4	4	–	–	
Brendan Fleiter	8	8	4	4	4	4	5	5	
Susan Bitter	1	1	–	–	–	–	1	1	
Michael Byrne	5	5	2	2	–	–	2	2	
Peter Carne	4	4	2	2	–	–	3	3	
Michael D’Ascenzo AO	7	7	2	2	1	1	3	3	
Dominique Fisher	8	8	–	–	4	4	4	4	
Holly Kramer	5	4	2	1	–	–	2	2	
Bruce McIver	4	4	1	1	–	–	1	1	
Michael Ronaldson	1	1	–	–	–	–	–	–	
Jan West AM	1	1	–	–	–	–	–	–	
Talal Yassine OAM	1	1	–	–	–	–	1	1	
(a) Number of meetings held while a director/committee member
(b) Number of meetings attended
Note: One Board meeting was held at Australia Post operating sites.
Copies of the report
The 2016 Annual Report and supporting documentation can be found online at auspost.com.au/annualreport2016
To order a printed copy of the report email annual.report@auspost.com.au or phone 13 POST (13 7678).
Feedback
We’d like to hear your feedback so we can continue to improve our business, including how we report on our performance. To provide your feedback, visit our website or email annual.report@auspost.com.au
Contact details
Australia Post headquarters
111 Bourke Street
Melbourne VIC 3000
GPO Box 1777
Melbourne VIC 3000
Phone 13 POST (13 7678)
auspost.com.au/contactus
Twitter @auspost
Awards
Australia Post received a Silver award for its 2015 Annual Report at the 2016 Australasian Reporting Awards. arawards.com.au
Commitment to external initiatives
Australia Post is an active supporter of leading national and international sustainability initiatives.
Australia Network on Disability (member since 2004)
Australian Packaging Covenant (a signatory since 2002)
Carbon Disclosure Project (since 2015)
Catalyst (member since 2015)
Diversity Council Australia (member since 2010)
Earth Hour (supporter since 2007)
Equal Employment Opportunity Network (EEON) (member since 2016)
Global Reporting Initiative (reported in line since 2010)
London Benchmarking Group (member since 2009)
National Association of Women in Operations (NAWO) (since 2010)
Reconciliation Australia – Reconciliation Action Plan program (member since 2011)
Safety and Rehabilitation and Compensation Licensees Association (SRCLA) (President representation & member since 2009)
Social Traders Connect (member since 2015)
Supply Nation (member since 2010)
United Nations Global Compact (signatory since 2010)
UN Sustainable Development Goals
Credits
Editor/Project Manager
Lizzy Kingston
Design
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