Assessing Cross-Subsidy in Australia Post 2006鈥 7
Assessing cross-subsidy in Australia Post
2006–07
An ACCC report April 2008
© Commonwealth of Australia 2008 ISBN 978 1 921393 64 8 This work is copyright. Apart from any use as permitted under the Copyright Act 1968 no part may be reproduced by any process without permission from the Australian Competition and Consumer Commission. Requests and inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and Consumer Commission, GPO Box 3131, Canberra ACT 2601 Produced by the ACCC 04/08.
Contents
Glossary Summary Key findings 1. Introduction 2. Background 2.1 2.2 2.3 Australia Post ACCC role in the regulation of postal services Record-keeping rule powers
iv v vi 1 2 2 3 3 4 4 5 6 7 9 9 11 12 16 17 17 21 22 23 24 25
3. Framework for monitoring for cross-subsidy 3.1 3.2 3.3 3.4 Economic theory of cross-subsidy The regulatory accounting framework Using accounting information to proxy economic cost concepts The tests applied in this report
4. Analysis of Australia Post’s 2006–07 accounts 4.1 4.2 4.3 Changes to accounting policy Did any service group receive a subsidy? Is the source of the subsidy the reserved services?
5. Conclusion Appendix—RAF information not claimed as confidential Schedule 1: Service group definitions Schedule 3: List of account items for revenues Schedule 4: List of account items for cost Schedule 6: List of account items for fixed assets Schedule 7: Movements in valuation of non-current assets Schedule 9: Statement of service group usage
Glossary
ACCC Australian Competition and Consumer Commission
AIFRS
Australian Equivalents to International Financial Reporting Standards
attributable cost (AC)
costs that are part of a pool of common costs identifiable to a particular service by a separable cause and effect relationship Australian Taxation Office
ATO
cross-subsidy
the supply of one group of services at a loss made up by the profits on the
2006–07
An ACCC report April 2008
© Commonwealth of Australia 2008 ISBN 978 1 921393 64 8 This work is copyright. Apart from any use as permitted under the Copyright Act 1968 no part may be reproduced by any process without permission from the Australian Competition and Consumer Commission. Requests and inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and Consumer Commission, GPO Box 3131, Canberra ACT 2601 Produced by the ACCC 04/08.
Contents
Glossary Summary Key findings 1. Introduction 2. Background 2.1 2.2 2.3 Australia Post ACCC role in the regulation of postal services Record-keeping rule powers
iv v vi 1 2 2 3 3 4 4 5 6 7 9 9 11 12 16 17 17 21 22 23 24 25
3. Framework for monitoring for cross-subsidy 3.1 3.2 3.3 3.4 Economic theory of cross-subsidy The regulatory accounting framework Using accounting information to proxy economic cost concepts The tests applied in this report
4. Analysis of Australia Post’s 2006–07 accounts 4.1 4.2 4.3 Changes to accounting policy Did any service group receive a subsidy? Is the source of the subsidy the reserved services?
5. Conclusion Appendix—RAF information not claimed as confidential Schedule 1: Service group definitions Schedule 3: List of account items for revenues Schedule 4: List of account items for cost Schedule 6: List of account items for fixed assets Schedule 7: Movements in valuation of non-current assets Schedule 9: Statement of service group usage
Glossary
ACCC Australian Competition and Consumer Commission
AIFRS
Australian Equivalents to International Financial Reporting Standards
attributable cost (AC)
costs that are part of a pool of common costs identifiable to a particular service by a separable cause and effect relationship Australian Taxation Office
ATO
cross-subsidy
the supply of one group of services at a loss made up by the profits on the