Australia Post Wants Letter Rate Rise
Tuesday, 11th March 2008 at 1:00 pm
Australia Post has lodged a draft notification with the Australian Competition and Consumer Commission (ACCC) seeking to increase the basic postage rate and the price of Charity Mail.
Australia Post (AP) has asked the ACCC for an increase in the basic stamp rate from 50 cents to 55 cents claiming the increase is to help cover the growing costs associated with providing the letter service across Australia.
In terms of Charity Mail, the proposed increase would see bar-coded presale small letter prices rise from 31.2 cents to 34.4 cents and Off-Peak delivery of small charity mail increase from 29.6 cents to 32.8 cents.
AP says this is the first proposed increase in over five years.
The ACCC will now review the notification and undertake a consultation process with the community before finalising its decision.
Group Manager Letters, Allan Robinson, says rising fuel, wages and other transportation costs means stamp prices need to rise to ensure the future of the letters business.
Robinson says domestic reserved letters profitability dropped by 18 per cent last year and is expected to make a loss of around $12 million this year.
He says the number of delivery addresses for homes and businesses have increased by over 800,000 since the last price rise in 2003 taking the total number of delivery points to 10.3 million across the country.
He says the task has got bigger, the costs have increased, but growth in the letters area has only been modest.
Robinson says the ACCC notification will also seek an increase to pre-sort letters or ‘bulk mail’ which has not had a general increase since 1992 and accounts for over half of all letter volumes.
He says even with the proposed increase, the most common price for pre-sort small letters is still below what businesses paid in 1992.
Overall prices will increase by an average of 8 per cent with Business Bulk Mail increasing by 6.6 per cent.