Australia Post pushes ahead with post rate increases

A price hike of up to 16% in commercial and domestic mail almost certain to come into effect from 28 June.

 Swimming against the digital delivery tide, even greeting cards will go up by 10%, while in a knock to the not-for-profit sector, pre-sorted charity mail will rise by 8.1%. The increases are in line with those proposed by Australia Post last year, which were knocked back by the ACCC.

This time around AP under its new CEO, Ahmed Fahour (pictured), is confident the rises will get through. It has been in touch with the consumer watchdog about the need for greater clarity in connection with AP’s letter volume and cost forecasts as well as the specific actions taken to address those matters.

The increase will see an extra five cents added to the cost of a basic letter. The proposed increase would be the third in 18 years.

General Manager Mail & Networks Jim Marshall, said the decision had not been taken lightly. “While no-one likes a price rise, we are only seeking an increase in order to cover the cost of providing access to letter services for all Australians – no matter where they live.

“Rapid growth in areas such as western Sydney, south-east Melbourne, south-east Queensland and parts of Western Australia will add 2.5 million new addresses to Australia Post’s delivery network over the next decade.

“The projected growth in homes and business addresses over the coming decade will be equivalent to adding another Queensland or nearly four Adelaides to our network.”

Printing Industries will again oppose price increase. CEO, Philip Andersen encourages other printers to take action. “The situation today is no different to what it was in 2009 – if it makes paper based communications more expensive to end users, a significant proportion of the print and mailing house industry which operate in very competitive market environments,  will be adversely affected,” he said.

“Our industry has demonstrated time and time again that improvements in operational efficiency and productivity gains flowing from investments in new technology are possible and this should be the business philosophy that Australia Post adopts rather than opting for the quick fix of raising prices for its services.

“The print and mailing industries, which Australia Post is a part of, are daily facing increased competition from other mediums such as electronic mail and to have a business model based on constantly increasing service costs are a guaranteed way to ensure mail volumes will decrease.”

Printing Industries national manager for policy and government affairs, Hagop Tchamkertenian, said  Printing Industries would again lobby the ACCC to block the increases but needed to illustrate the likely adverse impact on the industry, for example in the areas of employment, production, profitability and business viability.

He called on the industry to respond by providing evidence that would support the Association’s stand.

“Please talk to me on (02) 8789 7361 or send your information or your material to your local Printing Industries office,” he said.