The Australian Competition and Consumer Commission (ACCC) has released its preliminary decision not to oppose Australia Post’s (AusPost) proposal for a 25% stamp price hike.
The consumer watchdog is now seeking feedback from the public to weigh in on whether this is a reasonable increase for ordinary letter service.
According to ACCC, AusPost intends to increase the price for ordinary letters delivered to the regular timetable from:
The ACCC says if you send about 15 small letters per year, the price increase means an extra $4.50.
It has been found that Australia Post is “not likely to recover revenue in excess of its costs for its 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,” says ACCC deputy chair Mick Keogh.
Is it not about time to get rid of the letter post service? The ACCC says AusPost’s ordinary letter delivery remains a crucial national service. However, it does recognize the “increasing financial pressure” it faces in the digital age.
But in the same vein, there is also a strong focus on financial pressure on consumers. Keogh says: “We consider that Australia Post should explore affordability measures for small businesses reliant on the letter service.”
Questions about government-owned postal service
The reasoning behind the increase in postal stamps has spotlighted the government’s ongoing efforts to make sure the AusPost delivers good earnings. Last month, the Financial Review reported about the financial troubles the postal service is still facing.
Almost a year ago, the government cautioned that the existing community service obligations of Australia Post were no longer “viable.”
According to media reports, postal service workers seem to be backing the idea of getting rid of letter deliveries.
In December 2023, Financial Review reported that the Communication Workers Union seems to favor the shake-up to reduce the daily letter deliveries.
Calls for modernization
Five months ago, Australia Post suffered a $200m loss. The letter department was at the center of the rotten apple. There were calls to “urgently modernize” or suffer more potential financial damage.
During its last full-year financial review in August 2023, Australia Post announced that it suffered a historic blow to its letter business. It dipped $384.1 million into the red. The following full-year financial report is expected in the next seven months. It’s then when an accurate picture will emerge of whether plans set out to modernize are working.
In 2023, Australia Post acknowledged it would lose more money unless it could secure the “necessary support required to modernize its business.”
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