Allowing Australia Post to charge up to $1 dollar per stamp on social mailing is liable to take the price pressure off the beleaguered business mailing industry.
In the face of the demand by Ahmed Fahour, CEO Australia Post, for unfettered freedom to set prices for mail deliveries, Bill Healey, CEO Printing Industries, is prepared to admit there may be merit in the proposed $1 stamp for so-called 'granny mail.' "The commercial mailing industry recognises that raising the price of general mail stamps to one dollar could provide sufficient scope to allow Australia Post to better maintain and promote business mail," he said.
His remarks came as the Australia Post honcho claims that without the ability to recalibrate stamp prices without restraint, the monopoly carrier cannot carry on without government subsidy. It will post its first loss in over 30 years following a $98 million first-half profit reported on Monday. Fahour claims the fall in profit was driven by growing losses of $151 million in the letters business, which is 57 per cent worse than the loss recorded by the letters business in the first half of last financial year.
This is despite figures reporting that government and business mail account for over 80% and up to 97% of mail. Australia Post sets its own rate for a two-tiered system in business mail without any oversight from the ACCC.
Bill Healey claims the release of the first half figures, the day before Fahour appeared before a Senate estimates committee is nothing more than a cynical attempt by its CEO to build support for major cuts to Australia’s postal services. Speaking on behalf of an alliance of employer groups and unions, Healey slammed the demand for the removal of price oversight saying it was inconsistent to have an unregulated monopoly pricing system.
"There has been no discussion with stakeholders and no promotion of the mail channel. Our members recognise the challenges facing the postal industry and are calling on the government to immediately implement the recommendation of last year’s Senate inquiry to establish an Industry round table involving all stakeholders before any changes to our postal service are considered,” he said.
“It is time Australia Post worked with industry stakeholders and the community to develop a clear strategic direction for the future of mail services rather than misleading the Australian public on the continuing effectiveness and demand for traditional mail,” said Bill Healey.
The call for consultation is likely to fall on deaf ears as Fahour presses for urgent action to allow him to lift postage prices. “The immediate challenge for our business is clear. We have been carefully managing the real decline in our letter volumes for the past seven years. But we have now reached a tipping point where we can no longer manage that decline, while also maintaining our nationwide networks, service reliability and profitability,” said Fahour.
“We urgently need reform of the regulations that apply to our letters service. A government-commissioned external report last year predicted that – without reform – Australia Post will incur $12.1 billion cumulative losses in letters, and $6.6 billion for the enterprise over the next 10 years.
“This year we are forecasting a full-year loss for the first time. It is urgent we make changes this year to ensure we can continue to maintain a reliable, accessible postal service for all Australians.”