Australia Post seeks postage increase

Australia Post has lodged a draft notification with the Australian Competition and Consumer Commission (ACCC) proposing to increase the basic postage rate by five cents, effective from early 2010.

The ACCC will assess the proposed change and invite public submissions before finalising its decision about the increase.

Group manager Letters, Allan Robinson, said the decision had not been taken lightly. "While we understand no-one likes a price rise, our history shows we only seek an increase to continue providing equitable access to basic letter services for all Australians - no matter where they live.

"Our record on productivity savings is impressive and we have passed the benefits on to postal consumers. If the basic postage rate had kept pace with inflation over the last two decades, the price of the 55 cent stamp would actually now be 70 cents," he explained.

Mr Robinson said that rapid growth in areas like western Sydney, south-east Melbourne, south east Queensland and parts of Western Australia will add 2.5 million new delivery points over the next decade.

"This growth is the equivalent to another Queensland or nearly four Adelaides being added to Australia Post's network over the next ten years. At the same time, costs keep increasing, and growth in letters volumes has levelled out over the last five years, with a fall this year in line with general economic conditions."

The proposed increase would only be the third in 18 years, well below any other essential service in Australia, with utilities by comparison increasing by over 33 per cent since 2003 alone. Revenue from the increase will help cover escalating costs associated with servicing the expanding network, such as transport and wages.

"Maintaining our system is important for all Australians with over 4,400 outlets making us the largest retail network in Australia. We're proud that more than 2,500 of these outlets are in rural and remote areas and are often the hub of local communities, while over 15,000 street posting boxes provide broad access to the postal system," said Mr Robinson.

Even with the proposed increase Australia Post makes no profit from its reserved letter service with the cost of providing the basic postage service exceeding what many Australians pay. For example to send a stamped letter from Brisbane to Perth costs 71 cents, not the 55 cents paid.

Australians have access to one of the most affordable and reliable letter services in the world. Australia's basic postage rate would still be the third lowest in the OECD following the proposed increase. In the UK and many European countries it costs an equivalent of more than $1 for a similar service.

Australia Post is the oldest continually operating organisation in Australia. Every day Australia Post delivers 21 million items to 10.5 million addresses across Australia. We are a self-funding business and receive no taxpayer funding.