Printing Industries has come out swinging as the ACCC rubber-stamps Australia Post's 17% price rise on mail, from 60 cents to 70 cents, raising concerns for CEO Bill Healey. Healey warns the potential consequences for the printing industry, labeling the move a "Trojan Horse" to sneak through further hikes on bulk mail rates which Australia Post does not have to refer to the ACCC.
Printing Industries has called for the restoration of Australia Post’s obligation to refer price increases for bulk mail services to the ACCC for approval. The Association believes the law does not provide the ACCC sufficient time to get stakeholder feedback on an increase which it has labelled a “Trojan Horse”. Healey says he is concerned that the real objective is to jack up prices for the much larger (70% volume) bulk mail category.
- Bill Healey, Printing Industries CEO
Healey says, “Bulk mail has always been a lucrative area for Australia Post because all of the preparation and pre-sorting work that Australia Post has to do for ordinary mail items was carried out by bulk mail handling operators employing modern and efficient processes at no cost to Australia Post. In return for these efficiencies bulk mail was charged at rates lower than ordinary mail.
“In 2011 the then Labor Government determined that prices surveillance only focus on ordinary letters, not on bulk mail. At the time we warned that removal of ACCC surveillance would allow Australia Post to increase bulk mail prices without taking into account the value of efficiencies provided by the bulk mail operators. In the same year, a review suggested the rate for ordinary letters would ‘effectively operate as a ceiling’ and other letter services would ‘generally be priced below the equivalent ordinary letter price’.”
Healey indicates that Australia Post is now signalling its intention to raise bulk mail rates in April by up to 7% – a decision it does not have to refer to the ACCC – and one that will have far greater consequences for the large bulk mail sector and on the use of printed communications.
“Australia Post has failed over a number of years to implement any tangible improvements to mail productivity, cost reduction; efficiencies and customer focus because it has operated without competition. The removal of ACCC surveillance has allowed it to increase price without discounting to take account of the value of the bulk mail sector efficiencies it benefits from. As a result the margin between the basic letter fee and other reserved services such as bulk mail has been significantly eroded," said Healey.
According to Healey, restoration of the ACCC scrutiny is therefore essential to promote efficient pricing and consumer protection.
Australia Post was unavailable for comment at the time of publishing.