i cant understand that, " if an item is deemed to have been packaged properly Aust Post WONT pay out " ?

I would have thought that if it had been packaged properly they would pay out because obviously it is their fault.

If it hasnt been packaged properly they should hesitate about paying out. Like not wrapping something glass or crystal and putting it in a non padded bag, is silly so Aust Post should say they arent responsible because it wasnt packaged properly ?