Stamp prices are set to climb 8.8 per cent from Monday, 1 September, after the ACCC found it would not object to Australia Post’s proposed increase.
The price of a basic small letter stamp will rise from $1.70 to $1.85, a large letter up to 125g will go from $3.40 to $3.70, and a large letter between 125g and 250g will increase from $5.10 to $5.55. Concession stamps, at 60 cents each, and seasonal greeting card stamps, at 65 cents each, will not increase.
The increase will only go ahead if the Minister for Communications does not disapprove the proposal.
The ACCC’s role is to assess whether Australia Post would collect more revenue than the efficient cost of providing its reserved letter services. It found Australia Post would likely still fall short of covering those costs, even with the higher prices.
“After assessing the proposal, we don’t object to Australia Post’s proposed price increases,” said ACCC Commissioner Anna Brakey.
“Our findings suggest Australia Post will still fall slightly short of recovering the efficient costs of providing these services, even with the proposed price increase.”
Letter usage has been declining in Australia for nearly two decades, and Australia Post expects volumes to keep falling by about 10 per cent a year over the next few years. Ms Brakey said the business was getting closer to breaking even on letters thanks to recent price rises and changes to its delivery model.
Australia Post estimates the increase will add about 75 cents a year to postage costs for the average household, which buys around five stamps a year. The ACCC noted many consumers use the letter service more than that and would feel a bigger impact.
Businesses that rely on letters, or are required by law to correspond by post, are expected to absorb most of the cost.
“Businesses will bear most of the additional costs from this increase, and will likely pass these postage costs on to consumers,” Ms Brakey said.
The ACCC said it had closely considered public submissions opposing the increase, but reached its decision through a cost-based assessment consistent with its regulatory role. Only the Minister for Communications can reject a price increase proposed by Australia Post.
More information on the ACCC’s decision is available at accc.gov.au.
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