Australia Post has welcomed the regulator’s announcement that it will not oppose the mailing organisation’s proposal to raise the basic postage rate from 55c to 60c, along with associated rises for Small, Large and PreSort letter services, effective from 28 June.
The ACCC said on Friday that its decision was based on its observation “that there is currently significant pressure on Australia Post’s reserved service revenue streams”.
“Even with the proposed price increases and an efficient reduction in operating costs, the ACCC assesses that Australia Post still faces a loss on its reserved services. For this reason, the ACCC has not objected to Australia Post’s proposed price rises.”
ACCC chairman Graeme Samuel added that “based on the current forecasts of letter volumes and costs, the ACCC considers that no changes to the basic postal rate should be required for the next two years beyond those proposed for June 2010”.
Printing Industries described the ACCC investigation into the proposal as a “charade”.
The association slammed the decision, reiterating its claim that Australia Post should do more to reduce its own costs rather than passing on them on to consumers and business.
Hagop Tchamkertenian, national manager for policy and government affairs, said: “Today’s decision reconfirms industry fears that the whole process was a fait accompli and a charade from day one.”
“Our submission clearly outlined the reasons why the 2010 price notification should be rejected. Printing Industries believes that Australia Post has not yet fully exhausted its cost based responses to falling letter volumes.”
A survey by Printing Industries earlier this month revealed that 82% of printers believed their productivity would be affected if the hikes go through.
Printing Industries is now calling on Senator Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy, to intervene in the matter.
Australia Post executive general manager of postal services Jim Marshall claimed that the organisation had “worked hard to keep price rises to minimum”.
“It’s not just about putting up the cost of stamps: we’ve found ways to work smarter, employing a cost reduction program over the last year which has extracted an efficiency dividend for our operator,” he said
The ACCC also said it had factored criticism of Australia Post’s business model into its investigation.
“Australia Post has now started to implement cost-reduction strategies, however the ACCC considers that its cost reductions could be larger,” the regulator said.
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