Australia Post has gained official approval for a 9% price increase in the basic stamp price tohelp it cover rising costs and the need to extend its delivery network.
The Australian Competition and Consumer Commission (ACCC) announced that it has no objection tothe postal operator increasing the basic postage rate by five cents to 60 cents, effective from 28June.
The new price represents only the third price rise in 18 years and even after the priceincrease, the country will still have the third lowest basic price rate in the OECD, Australia Postsaid.
Even with the increase, Australia Post makes no profit from its reserved letter service, withthe cost of providing the basic postage service exceeding what many Australians pay. For example tosend a stamped letter from Brisbane to Perth costs 71 cents.
Australia Post Executive General Manager, Postal Services, Jim Marshall, said: “While weunderstand no one likes a price rise, we’ve worked hard to keep price rises to minimum. In fact thebasic postage rate has not even kept pace with inflation over the last two decades. If it had, theprice of the 55 cent stamp would actually now be 70 cents.”
The ACCC objected to the proposed prices in a July 2009 draft notification, citing a number ofissues; Australia Post’s subsequent notification has addressed these issues, including furtherinformation on letter volumes and cost projections and management. Marshall said that the ACCC’sdecision showed that they recognised the changing environment within which the letters businessoperates and the concerted efforts that Australia Post has made to improve productivity.
“It’s not just about putting up the cost of stamps; we’ve found ways to work smarter, employinga cost reduction programme over the last year which has extracted an efficiency dividend for ouroperator,” said Marshall. “Despite declining letter volumes we must continue to find ways toprovide a reliable mail service for all Australians no matter where they live.”
Rapid growth in areas like western Sydney, south-east Melbourne, south east Queensland and partsof Western Australia will add 2.5 million new delivery points over the next decade. “This growth isthe equivalent to another Queensland or nearly four Adelaides being added to Australia Post’snetwork over the next ten years. At the same time, costs keep increasing, and letters volumes,which have levelled out over the last five years, are forecast to decline in future years,”Marshall added.
In April, Australia Post revealed its new business direction, entitled Future Ready, announcingthe creation of four new strategic business units: Postal Services, Retail Services, Distributionand Express Services and e-Services.
