Australia Post has been given the all clear by the Australian Competition and Consumer Association to raise the basic postage rate from $1 to $1.10 despite paper and printing industry efforts to block it for fear it will lead to further business mail price hikes.
The ACCC launched a review of Australia Post’s proposed rise in August and today announced it had decided to not object to the increase which will come into effect in January 2020.
The move has been condemned by both the Printing and Visual Communication Association (PVCA) and The Real Media Collective for risking the ongoing sustainability of the printing and related industries.
“We are satisfied that the proposed price increases are unlikely to result in Australia Post recovering more than its cost of providing monopoly letter services, given the forecast decline in letter volumes,” ACCC Commissioner Cristina Cifuentes said in a statement.
The decision to support Australia Post’s proposal came despite submissions from both the PVCA and TRMC which argued against the proposal on the grounds that it will push up the BPR and in turn force an increase in business mail pricing. Any increases in the cost of postage will put further pressure on the Australian printing industry going forward as it continues to promote print as a means of communicating and marketing.
Since 2016 postage prices have dramatically risen with PreSort, bills and letters rising by 56 per cent, Print Post which mails subscriptions publications like magazines, increasing by 28 per cent. Promo Post has jumped 50 per cent and charity mail went up 25 per cent.
PVCA chief executive officer Andrew Macaulay harshly criticised the ACCC’s decision and said it had failed in its mission but has vowed to continue to have dialogue with the federal Communications Minister Paul Fletcher and Australia Post going forward.
“The ACCC is supposed to be the protector and what we are seeing is it endorsing gross inefficiency,” Macaulay told Sprinter.
“This decision has reinforced the power of a government monopoly to gouge private sector SMEs for their efficiency gains and productivity improvements and provides a further buffer for this monopoly from market forces that would have forced it to innovate to find efficiencies.
“I will continue to have dialogue despite our disappointment that quite clearly they have had the wool pulled over their eyes.”
The Real Media Collective chief executive officer Kellie Northwood told Sprinter that while disappointed with the decision, the Collective will continue to work with Australia Post while also exploring international models of postal service provision and non-Australia Post options.
“We are disappointed with the ACCC’s decision, however we knew from the outset under the current legislation and ACCC’s remit only applies to the Basic Postage Rate and not across Business Mail, that our submission and application to block the increase was limited legally,” Northwood told Sprinter.
“Australia Post have increased Business Mail over last four years by up to 56 per cent and the burden this places on the print and mail industries is untenable.
“The Collective is committed to building future proofed solutions for our members and broader industry and to that end we are investigating the opportunity to expand existing non-Australia Post distribution networks, looking to international models and other opportunities.
“We cannot rely upon Australia Post to operate under a commercial model, nor government under the current legislation to intervene, we must lead this industry and as such we address our Mail Industry Coalition as a ‘call to arms’ working together with members and like-minded industry associations to develop solid outcomes for the future strength of the business mail sector.”
Northwood also committed the Collective to continue lobbying Australia Post CEO Christine Holgate and working with industry in a meaningful manner.
“We seek a solutions focused remit rather than current pricing policy and consultation practices which are non-inclusive and at times, arguably, dictatorial,” Northwood said.
“We welcome the Australia Post review under Boston Consulting Group this year and will continue to ensure government is well-versed on industry’s concerns and opportunities across the print and mail industries in Australia.”
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