Australia’s consumer watchdog has approved a 43% increase in basic postage rates, opening the door to Australia Post’s plan to hike prices on all commercial and bulk mailing.
Australia’s consumer watchdog has approved a 43% increase in basic postage rates, opening the door to Australia Post’s plan to hike prices on all commercial and bulk mailing.
Australia Post lodged a draft notification with the Australian Competition and Consumer Commission (ACCC) in August to increase the Basic Postage Rate (BPR) from 70 cents to $1, effective 4 January 2016.
The announcement by the ACCC that it “does not object” to the proposed ordinary (stamped) letter prices, including the BPR increase, was welcomed by the national carrier. Ahmed Fahour, MD & Group CEO, Australia Post, said the decision was "the second, critical step in letters reform" after approval was granted in September by the federal government to introduce a new two-speed letters service.
"We have now secured the two reforms essential to ensuring a sustainable letters service," said Fahour. "The decision by the ACCC to not object will allow Australia Post to continue to support over 4,000 Post Offices which provide an excellent service to the Australian community. Post Office licensees will receive, on average, a $25,000 boost per annum, which is part of the additional $125 million increase in annual payments that Australia Post has committed to for the Licensee network. It will also allow Australia Post to recover more of the cost of the service while maintaining five-day a week delivery."
Plans are already well underway for the introduction of a two-speed letters service for consumers from 4 January.
The Priority service will offer delivery within 1-4 business days depending on destination, while the Regular service is up to two business days longer than Priority. To send a letter at the faster Priority speed, customers will need to purchase a Priority label from their local Post Office or the Australia Post online shop and place it next to the stamp. Based on the $1 BPR, a Priority label will cost $0.50 cents. Australia Post will maintain the concession stamp price at 60 cents, which is available to 5.7 million eligible Australians, and season greeting cards will stay at 65 cents.
Earlier this year, the mailing industry and postal unions launched a campaign against the proposed price hikes for stamps and bulk mail. Printing Industries organised meetings in Sydney and Melbourne of all mailing industry stakeholders to map out a strategy to fight what it called ‘unprecedented’ increases.
“These are huge, across-the-board increases of over 40 percent and could result in massive job losses of between 20,000 and 30,000 in just the next 12 months, and that won’t be the end of it,” warned David Docherty, director of D&D Mailing Services.
In announcing its decision, the ACCC said it was important that Australia Post continued to focus on achieving cost reductions and operational efficiencies. “We will look closely at Australia Post’s progress in this area in considering any future proposal for price increases,” said ACCC Commissioner Cristina Cifuentes.
Increases in postage rates need to be approved by the federal Minister for Communications before they can be introduced.