The New Zealand Post Office entered the twentieth century as a burgeoning government department with over 1,700 branches.
Rapid growth of the Post Office continued throughout the century, with its broad role as post office, savings bank and telephone exchange cementing its place in New Zealand society. Public demand for its services, including the growth of private telephones in people's homes, and the introduction of internal and international airmail services in the 1930s, enabling faster, more efficient mail services, ensured its future.
By the middle of the century, the Post Office was a complex and financially successful organisation – fulfilling political, social and economic needs. Its role in the community was expansive. Beyond the traditional communication services, the Post Office provided important community services including registering births, marriages, deaths and cars, accepting television and fishing licence fees, enrolling people to vote, and collecting pensions. Post Offices also provided daily weather and temperature checks for the Meteorological Office, and postmasters were able to perform marriage ceremonies.
In the 1960s and 70s steps were taken towards better managing the ever-increasing volumes of national and international mail: the installation of New Zealand's first mechanical mail sorting machine in the Auckland parcel depot, and the introduction of address postal codes to simplify bulk mail sorting, but increasingly the tension between political and commercial pressures meant the business was not operating efficiently.
By the 1980s, the variety of roles, the sometimes-conflicting needs of three different businesses, and political considerations were major constraints on the Post Office. It was increasingly unable to meet growing consumer demands and the postal side alone was losing over $20 million a year, with expectations that this would balloon in the future.
In 1985, Jonathan Hunt, Postmaster General, ordered a review of the organisational and management structure of the Post Office. The subsequent Mason-Morris report of 1986 called for sweeping changes, separating the three core businesses to operate as independent State-owned corporations.