Australia Post has lodged a draft notification with the Australian Competition and Consumer Commission (ACCC) seeking to increase the basic postage rate from 50 cents to 55 cents to help cover the growing costs associated with providing the letter service across Australia.

This is the first proposed increase in over five years and the ACCC will now review the notification and undertake a
consultation process with the community before finalising its decision.

Group Manager Letters, Allan Robinson, said rising fuel, wages and other transportation costs meant stamp prices
needed to rise to ensure the future of the letters business. Domestic reserved letters profitability dropped by 18
per cent last year and is expected to make a loss of around $12 million this year.

“The number of delivery addresses for home and businesses has 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,” Mr Robinson said. “The task
has got bigger, the costs have increased, but growth in the letters area has only been modest.

“Even with the proposed 55 cent stamp rate, Australians will have access to one of the most affordable and reliable letter services in the world. It is, and still will be, the third lowest basic postage rate in the OECD. In the USA it
costs an equivalent of 58 cents, while in the UK it is the equivalent of 74 cents.

“The impact on most consumers will be minimal, as an example if someone sends 50 letters a year; it will cost an additional $2.50 over 12 months.”

Mr Robinson said the ACCC notification will also seek an increase to PreSort letters or ‘bulk mail’ which has not had a general increase since 1992 and accounts for over half of all letter volumes. Even with the proposed increase, the most common price for PreSort Small Letters is still below what businesses paid in 1992.

Overall prices will increase by an average of 8 per cent compared with the Consumer Price Index, which will have increased by an estimated 15 per cent from January 2003 to July 2008.

“Last financial year Australia Post delivered over 96 per cent of domestic letters on time or early,” added Mr Robinson. “This increase ensures we can continue to invest in the business to maintain its high level of service in the future.”