Does the Taoiseach agree that the postal service is an essential element not only of the economic infrastructure but of the social infrastructure? Will he instruct the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, to address the ongoing and developing crisis in the postal service as proactively as necessary? Today is the eve of a day of industrial action by thousands of postal workers throughout the State as a direct result of a serious breakdown in relations between staff and management in An Post.

Does the Taoiseach accept that there are serious questions for management to answer regarding the management and the presentation of An Post's finances? Is he aware that An Post has failed to honour a string of national agreements with the trade unions representing its workers? What is the Taoiseach's position regarding what has been described as wanton destruction of the postal service by current management? Does he accept that a national asset and service that has been available throughout the State for generations should now be downgraded, with reduced opening hours, a contraction in deliveries to rural houses and the shutdown of SDS, with the loss of hundreds of jobs? That will have a great effect, particularly on small businesses outside the major population centres——

The Deputy's two minutes are concluded.

——that are dependent on the postal service. Will the Taoiseach advise the House of the steps he and the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, propose on what I have described as the eve of a day of industrial unrest within this essential service?

There are difficulties in An Post, and I answered a question on this about a month ago. At that stage I urged management and staff to work through the established industrial relations machinery to resolve the areas of disagreement rather than resort to unnecessary industrial action. The financial position of An Post has been precarious last year and this year. The volume of post has dropped by 7% in real terms and that is creating problems for management and staff. Last year there were operational losses of €43 million, following losses of €24 million the previous year. The company will make an operational profit this year by not implementing the increase agreed under Sustaining Progress and cutting back on non-pay costs. That is the only way it is surviving.

The company will probably record a loss and its provision regarding the costs associated with the closure of SDS will be included in the accounts. An Post and the communication workers have agreed Christmas delivery arrangements in a deal brokered by the Labour Relations Commission, which covers overtime, casual workers and extra deliveries. Problems with the agreed Christmas arrangements that arose in Galway are being discussed today in the Labour Relations Commission.

Regarding the industrial action and unrest tomorrow, the Communication Workers Union has obtained a mandate from its membership for strike action, starting with a one-day strike tomorrow. It is not clear what will happen thereafter. Naturally, the Minister is concerned, as are the board, staff and trade unions. Big challenges lie ahead for An Post, such as the structural decline in mail volume. If one has less work and less business, one must start doing something with one's company.

There is enormous competition from the express sector. Technology is eating into An Post's business through e-mailing and texting. Obviously, the long history of partnership with no real change delivered is creating problems, and I hope that the two sides can resolve those interests. I need hardly say it, since they both know it themselves, but if one is losing business and has a great deal of competition, the one really busy period of the year for postal management is the last time to close one's services to the public, since they will move on.

Workers are owed their money.

Deputy McGrath, please allow the Taoiseach to speak without interruption.

I hope that they can resolve their difficulties as quickly as possible.

I am sorry to say that the Taoiseach has neither indicated what steps he is prepared to take to address the crisis nor properly explained to the House how the crisis arose. Is the Taoiseach aware of the great discrepancies in the financial figures presented by An Post management? In July 2003, the then management stated that by year end it would record a profit of €1 million. Three months later, a new CEO said that there would be a loss of €46 million. That has never been properly explained. Has the Taoiseach, the Minister or the latter's predecessor made inquiries regarding those major discrepancies?

The Taoiseach made the point that volumes have dropped, but I wonder if that holds up statistically for today's significant use of the postal service today in terms of advertising and promotional mail, which I believe is operating in unprecedented volumes. We need to know the statistical facts.

The Deputy's minute is concluded.

Recognising that the postal service is of such importance to people the length and breadth of the jurisdiction, does the Taoiseach not recognise that any further contraction in the service will be a major blow to isolated and elderly people, particularly in rural Ireland, who depend on the contribution of the postal service, not only to the economic infrastructure but also the social infrastructure? Why would a self-proclaimed socialist Taoiseach——

The Deputy's time is concluded.

——preside over a situation where the most profitable public services are gobbled up by private contractors, leaving services such as An Post, which is of great importance to everyone in the economy——

I ask the Deputy to give way to the Taoiseach.

——and is facing severe contraction?

I repeat there are serious issues. The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, has been in touch with the board, management and unions. The important message that we should give them is that they should try to resolve those difficulties. Whatever the argument about the statistics, the audited figures show that An Post had operational losses of €43 million last year, on top of a loss the previous year of €24 million, making a total of €67 million. This year it is only managing to keep its service going by not paying increases under Sustaining Progress under the inability to pay clause. Therefore, the company has problems, some of which I mentioned. One cannot force people to post letters or use technology, including e-mail. One cannot intimidate people into doing that. We have the lowest use of post per head of population in the European Union. People are communicating the way they want to. That structural decline has resulted in a decrease by 7% in the volume of mail, which is serious. I need not tell the Deputy that if there is nothing to be delivered, one cannot deliver it. That is the difficulty. The last thing the management and workers should do at the one time of the year when the company is busy, due to the tradition of sending Christmas cards, letters and parcels, is to close the company. I hope all sides, board, management and unions, will try to resolve these issues — which is what the Government urges them to do — and to continue to deliver the good service to people that they did in the past.