Post office's passport business key to country business

COUNTRY businesses will suffer if Australia Post loses a vital passport contract with the Department of Foreign Affairs and Trade, the licensees' lobby group says.

Australia Post's contract to supply passport application lodgement services ends on June 30, 2017.

DFAT indicated previously it could award the contract to several companies.

There are also fears would-be travellers would have to go well out of their way to complete passport application requirements if they could not complete them at post offices.

With the number of applications set to hit three million a year in 2019, the passport business could be a major revenue stream for small Australia Post operators.

Post Office Agents Association Limited director Bob Chizzoniti urged DFAT to re-award its contract to Australia Post.

About 900 of the country's 2900 LPOs could be affected if the contract went to other companies.

"Passport interviews are an important business stream for LPOs," Mr Chizzoniti said. "It's not just about the fee for performing the interview - it's about all the ancillary business that comes along with it.

"LPOs are one-stop-shops for Australians heading overseas.

"Customers can buy travel insurance, order foreign currency, set up travel debit cards, buy travel SIM cards and much more."

A DFAT spokesman said the department was legally obligated to conduct an open and competitive tender process.

About half of Australia's LPOs are located in regional, rural and remote areas and in some cases they are the only business in small towns.