While the ACCC doesn’t have the power to approve the proposed price increase, it will notify Australia Post if it objects to it. Photo: James Coleman.
The nation’s competition regulator (ACCC) is seeking feedback from businesses and consumers on Australia Post’s draft proposal to increase fees, stemming from its loss of $361.8 million in the past financial year.
AusPost is looking to increase its basic postage charge by 20 cents from mid-2025, along with the price of delivering reserved ordinary small letters and ordinary large letters.
It is also proposing to lift the price of a range of its other reserved-letter services. This includes the cost of priority labels by 30c (from 70c to $1), which, combined with the proposed regular stamp price increase, means priority ordinary small letters are suggested to rise by 50c (from $2.20 to $2.70).
However, AusPost will not increase prices for concession stamps (60c each) or stamps for seasonal greeting cards (65c).
Consultation on these increases is open until 22 December, 2024, and includes a short survey.
Following a review of the postal services’ modernisation last year, the Department of Infrastructure, Regional Development, Communications and the Arts recommended the government include a package of reforms to legislation affecting the performance standards of AusPost.
In April this year, some of these consequential amendments came into effect, including:
- Reducing the performance standards for letter delivery frequency from every business day to every second business day (while parcels are still delivered daily)
- Relaxing the performance standards for regular letter delivery timetables by one business day
- Removing the performance standards for the delivery of priority letters.
The Federal Government also noted in its announcement a year ago that it would work with AusPost to develop a pricing oversight mechanism to provide more certainty over a longer-term price path for basic postage.
AusPost says it will propose increasing the basic postage rate by 15c in July 2026 and July 2027. Source: AusPost.
In its reasoning for the price increases, AusPost said that despite improvements with its modernisation reforms and recent price increases, it still suffered a loss of $361.8 million in the 2023-24 financial year.
“We expect that it will continue to generate losses, and that these losses will grow substantially from the 2025-26 financial year unless further price increases are implemented,” AusPost’s draft price notification read.
“This is due to the ongoing decline in our letter business, as both senders and receivers continue shifting from physical mail to digital alternatives.
“In the 2023-24 financial year, letters volumes fell to levels we have not seen since the 1950s, while Australia’s population has trebled over the same period.
“Delivering a decreasing number of letters to a growing and increasingly dispersed network of delivery points fundamentally challenges the economics of letter delivery – a challenge that is being faced by many postal agencies around the world.”
Following this consultation process, the ACCC will release a preliminary view on the draft price notification in early 2025. AusPost may then lodge a formal notification of a price rise with the ACCC.
The company must also give written notice of the proposal to the Minister for Communications Michelle Rowland. It can only increase the basic postage rate if the Minister does not disapprove the proposal within 30 days.
Original Article published by James Day on PS News.
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