Up to 200 post offices are likely to close over the next 12 to 18 months in the absence of new State financial support, postmasters have warned.
Ned O'Hara, general secretary of the Irish Postmasters Union, told the Oireachtas Joint Committee on Transport and Communications Networks that those most at risk of closing were larger outlets in the cities which were "the backbone of the network".
He said this was because larger post officers tended to face higher rents and running costs.
Mr O’Hara suggested that post offices facing the greatest jeopardy were those at the margins of profitability.
Committee members across all parties backed proposals for the introduction of State financial support or a public service obligation payment.
The IPU told the committee that transformation payments for postmasters that had been agreed with An Post in 2018 were on the assumption, that by 2021, there would be a range of new Government services made available to support the network.
However, it said that none of these additional services had materialised and the transformation payments were now scheduled to come to an end in June.
The committee heard that some postmasters could lose up to €10,000 in payments as a result of the ending of the payment.
The IPU said the day of reckoning had arrived for the post office network and the Government needed to act quickly and put in place a financial intervention.
Mr O'Hara said there had been no discussions between An Post and postmasters about a new initiative that had been announced recently between it and Bank of Ireland on foot of the planned closure of bank branches around the country. He said talks were due to commence next week.
The IPU said consultants Grant Thornton had recommended in a report last autumn that the Government introduce annual public service obligation (PSO) funding of €17million. It said this would represent value for money for the State and provide a return of between €334 million and €776 million.
`Ready, willing and able'
The IPU said postmasters were ready, willing and able to provide many additional services with immediate effect. It said previous expert reports had suggested these could include motor tax, licence renewals, registrations, identity verification, community information, IT/office hubs.
Committee chairman Kieran O'Donnell of Fine Gael said this was not a political issue. He said there was a need for an interim financial solution to be put in place to allow for a new government inter-departmental group to do its work on the future arrangements to apply.
Senator Timmy Dooley of Fianna Fáil said the only way to proceed was to make a very clear demand of Government that a public service obligation be put in place as a first measures to ensure that there were no further closures of post offices.
Joe Carey of Fine Gael said the introduction of public service obligation was the only option available to sustain the current chain of post offices.
Mr O’Hara said postmasters were prepared to take on whatever Government services were required. However he said while this process was being put in place, unless the post office network received support in the form of a fixed payment “it is going to collapse”.
Asked by Darren O’Rourke of Sinn Féin what could happen in a worst case scenario, Mr O’Hara said up to 200 post offices could close over the next 18 months.
Mr O’Donnell said this could mean that 25 per cent of the network operated by postmasters shutting down.
Mr O’Hara said as things stood at present from July transformation payments were scheduled to cease.
He said the average earnings of postmasters were about €60,000 from which the cost of premises had to be made. He said under the changes planned from the end of June postmasters would lose ten per cent or €6,000 as well as an additional top- up payment which could amount to a further €4,000. This would bring the average earnings down to €50,000.
“I spoke to a postmaster in Dublin recently in a busy office whose contract was advertised at €80,000. The costs associated with that contract are €70,000. Whoever takes over the post office will be faced with costs of €70,000 and revenue of €80,000.”
“They will be working for less than the staff they employ”.
Labour Party communications spokesperson Duncan Smith urged the Government to take a long term, strategic approach to the post office network. He said if nothing was done all that may be left on the main streets in towns across the country would be fast food outlets and bookies.