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BTCE lnformation Paper 35greater flexibility and more certainty for Telecom, via a three-year rolling programof loans. By 1990-91 Telecom will be subject to all relevant taxes.Financial controls established under the reform package require Telecom tosubmit regular corporate plans to the Minister, undertake regular assetrevaluations, work towards a preset financial target, and achieve profitabilitylevels comparable with those of similar overseas companies. Performanceagainst those targets is to be indicated in annual reports.Concerning profitability, on a historical cost basis, Telecom’s rate of return wasbelow the private sector average prior to 1984, but has approximated the privatesector average in recent years (see chapter 3). The Industries AssistanceCommission (now the Industry Commission) has made estimates of performancein real terms. These show negative returns for the years 1975-76 to 1981-82,and low rates in all subsequent years with the exception of 1987-88, when 8.0per cent was achieved (IAC 1989a). Rae Committee estimates of real rates ofreturn were low but positive, averaging 3.8 per cent for the period 1975-76 to1981-82.These figures, based on annual reports, do not include any allowance forTelecom’s community service obligations. Had these been allowed for, the rateof return would have been somewhat higher (see chapter 3). Telecom’s CSOswere valued for the first time in 1989, and in future financial statements will beexplicitly brought to account.AUSTRALIA POSTAustralia Post was formally established in 1975 as the Australian PostalCommission by the Postal Services Act 7975 to take over postal and relatedservice functions of the former Postmaster-General’s Department. TheCommission was responsible under the Act for the regulation and managementof Australia’s postal services, which, in effect, gave Australia Post a qualifiedmonopoly on letter mail.Like Telecom, Australia Post had its origins in aconstitutional obligation to providepostal, telegraphic, telephonic and like services from 1901, when State serviceswere transferred to the Commonwealth and administered by the PostmasterGeneral’s Department. Reasons for initial Commonwealth involvement outlinedfor Telecom above apply also to Australia Post.The 1975 Act required theCommission to perform its functions ‘in such a manneras will best meet the social, industrial and commercial needs of the Australianpeople for postal services and shall, so far as it is, in its opinion, reasonablypracticable to do so, make its postal services available throughout Australia forall people who reasonably require those services’ (Postal Services Act 1975). Inpractice this has resulted in a CS0 to ‘provide a universal postal service at auniform basic rate’.18