The great debate about what to do with Hongkong Post has begun. There will be many twists and turns before we know the final outcome, but one thing is clear: it is vital to keep the staff on board at every step. We ultimately want to have an organisation of committed professionals running a world-class outfit. Early indications are that there could be problems.
We are here because of a sharp deterioration in the post office’s financial position starting in 2017-18. A loss of more than HK$100 million (US$12.8 million) that year was followed by losses of over HK$200 million in 2018-19 and more than HK$300 million in 2019-20. Total losses in the past eight years amount to HK$2.9 billion, and the Legislative Council recently approved a HK$4.6 billion capital injection to cover the expense of maintaining the postal service’s operations for the next three years while a review considers options for the long term.
This is a far cry from the heady days of 1995, when the post office was turned into a trading fund. That means it enjoyed more flexibility in business matters but had more responsibility for its overall financial situation. The sudden swerve to substantial losses does not mean the original decision on trading fund status was wrong, but it is a reflection of the enormous changes in the operating environment in recent years.
Mail volumes everywhere have collapsed as people switch to email and other forms of electronic communication. Why bother with a long letter from home to a child studying overseas when you can make a free call on your mobile phone and see each other in the process?
The situation is still changing. In the past, the post office could count on substantial revenue from philatelic sales to offset shortfalls in other areas. In the era of screens and electronic games, though, do children still collect stamps with the same fervour of previous eras? Will this funding stream also fade in time?
Options being floated for the future include wholesale privatisation, corporatisation or reversion to normal government department status.