The Australian Competition and Consumer Commission (ACCC) has revealed that it does not object to Australia Post’s draft proposal to increase the price of its reserved ordinary letter service by 9.1 per cent.
Under the draft proposal, Australia Post said it intends to increase the basic postage rate, which is the price to deliver ordinary small letters, from $1.10 to $1.20. It also intends to increase the price of ordinary large letters up to 125 grams from $2.20 to $2.40, and the price of ordinary large letters between 125 grams and 250 grams from $3.30 to $3.60.
The ACCC said Australia Post is not proposing to increase the price of concession stamps ($0.60) or stamps for seasonal greeting cards ($0.65).
“We are satisfied that the proposed price increase is unlikely to result in Australia Post recovering more than the cost of providing the letter services,” ACCC commissioner Anna Brakey said.
“The combination of declining letter volumes and an increasing number of delivery points around the country has increased the cost of delivering letters.
“The ACCC acknowledges the current inflationary environment and cost-of-living pressures faced by Australian consumers, and we have considered the affordability impacts of the proposed price increase on consumers and small businesses.
“The average Australian sends about 15 letters each year, meaning the increase is likely to cost about $1.50 per year for people without a concession card.”
The ACCC added that it assesses price increase proposals for letter services in accordance with the Competition and Consumer Act. The ACCC added that it does not have the role of approving any proposed price increase under the Australia Post price notification framework.
“Australia Post is not subject to any obligation to notify the ACCC about a decision to increase the price of any other service, such as its parcel services,” it mentioned.
The ACCC will issue a final decision after it receives a formal price notification from Australia Post. This is expected to occur in December.
Australia Post is also expected to notify the Minister for Communications of the proposed price increase and must not increase prices if the Minister rejects the proposal within 30 days.
Australia Post has told the ACCC that it intends to implement the increases in January 2023.
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