Australia’s consumer watchdog has indicated it will not oppose Australia Post’s bid to increase stamp prices by as much as 25 per cent as it seeks stakeholder feedback on the proposed decision.
The nation’s postal service last year announced prices for reserved ordinary letters delivered to the regular timetable would be changing from January after it reported a $384.1m net loss in its letters business over the 2023 financial year.
Under the changes, the price of Australia Post’s ordinary small letter stamps will increase from $1.20 to $1.50.
Ordinary large letters up to 125g with a stamp would cost $3 (increasing from $2.40) and larger letters between 125-250g with a stamp would be $4.50 (up from $3.60).
For an average Australian – who sends about 15 small letters per year – the price increase would result in an additional cost of $4.50 per year.
The price of concession stamps and seasonal greetings stamps will not go up.
In a statement, the Australian Competition and Consumer Commission (ACCC) said it was seeking stakeholder feedback on the preliminary view that it would not object to Australia Post’s proposal.
The watchdog said the company was not likely to recover revenue in excess of its cost for reserved postal services.
“Our assessment found that Australia Post’s proposed price increase is unlikely to produce surplus revenue for the reserved letter service over the coming years,” ACCC deputy chair Mick Keogh said.
Australia Post said the changes were an attempt to make sure the company stayed financially viable.
“As we are entirely self-funded and receive no ongoing government funding, we need to ensure we reduce losses in our letters business,” group chief executive officer and managing director Paul Graham said.
The number of delivery addresses are forecast to grow about 200,000 per year, but the volume of letters delivered will go down by 11.3 per cent a year until 2025-26.
“Australia Post’s ordinary letter delivery remains a crucial national service; however, it faces increasing financial pressure in a landscape now dominated by digital forms of communication,” Mr Keogh said.
“We’re very conscious of the cost-of-living pressures currently affecting Australians … we acknowledge that the stamp price increase will have some impact on consumers and small businesses.
“We consider that Australia Post should explore affordability measures for small businesses reliant on the letter service.”
The ACCC has provided Australia Post with a series of recommendations to improve its cost allocation model, record keeping and information sharing.
Submissions in response to the preliminary view paper are open until February 15.
They will be considered by the ACCC in making its final decision.
