Australia Post has notified the ACCC of a proposed increase in the standard postage rate.
Australia Post has notified the Australian Competition and Consumer Commission (ACCC) of a proposed increase in the standard postage rate. The increase, from 60 cents to 70 cents, will be the fourth of its kind in the last 22 years, with the previous in 2010 when the cost rose from 45 cents to 60 cents.
The move will address the issue of inflation with Managing Director and CEO of Australia Post, Ahmed Fahour, claiming “the current stamp price no longer reflects the true cost of delivering each letter and stamp price increases have not kept up with inflation”.
According to Mr Fahour, the 10 cent increase will help to partially offset Australia Post’s growing losses, which totalled $218 million in its regulated mail business for the 2012/13 financial year. This is in addition to the domestic mail business losing $147 million for the same period.
These increasing losses are due to falling letter volumes with a recorded 231 million fewer letters posted in the 2012/13 financial year, 6.4 per cent down on the previous year. On top of this, over the past five years, the volume of domestic letters posted in Australia has dropped by around 1 billion items.
The proposed price increase is set to flow through as additional payments to Licensed Post Office operators, in an attempt to help maintain the feasibility of a nationwide Post Office network. The domestic delivery network has expanded in line with the growth of Australia’s population over the past five years, which has increased from 10.5 million addresses in June 2008 to 11.2 million addresses in June 2013.
The notification also included a proposal to introduce a concession rate stamp. The stamp, available to an estimated 5.7 million eligible Australians, will allow them access to 60 cent postage on standard letters until 2017. “We are very mindful of the potential cost-of-living impact this increase might have on Australians – particularly pensioners, job-seekers and low-income earners and that’s why we’re proposing the introduction of the Concession Stamp Rate,” stated Mr Fahour.
“We are always reluctant to increase the price of postage but we know that it’s absolutely necessary to maintain essential services,” added Mr Fahour. It’s not all bad news though, even at 70 cents the Australian domestic stamp will remain among one of the lowest priced compared to the other countries in the Organisation for Economic Co-operation and Development (OECD).
What do you think? Is 70 cents too much to pay for a letter? Is this just a grab for money, or do you support Australia Post charging more for its services?
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