Australia Post welcomes price rise approval
Australia Post has welcomed the Australian Competition and Consumer Commission (ACCC) announcement that they have no objection to increasing the basic postage rate by five cents, effective from 28 June. The new 60 cent stamp price represents only the third price rise in 18 years. After the price increase, Australia will still have the third lowest basic price rate in the OECD.
Even with the increase, Australia Post makes no profit from its reserved letter service, with the cost of providing the basic postage service exceeding what many Australians pay. For example to send a stamped letter from Brisbane to Perth costs 71 cents.
Australia Post executive general manager, Postal Services, Jim Marshall, said: “While we understand no-one likes a price rise, we’ve worked hard to keep price rises to minimum. In fact the basic postage rate has not even kept pace with inflation over the last two decades; if it had the price of the 55 cent stamp would actually now be 70 cents.”
The ACCC objected to the proposed prices in a July 2009 draft notification, citing a number of issues; Australia Post’s subsequent notification has addressed these issues, including further information on letter volumes and cost projections and management.
“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,” said Marshall.
Marshall said that the ACCC’s decision showed that they recognised the changing environment within which the letters business operates and the concerted efforts that Australia Post has made to improve productivity, “Despite declining letter volumes we must continue to find ways to provide a reliable mail service for all Australians no matter where they live.”
Marshall said that rapid growth in areas like western Sydney, south-east Melbourne, south east Queensland and parts of Western Australia will add 2.5m new delivery points over the next decade.
“This growth is the equivalent to another Queensland or nearly four Adelaides being added to Australia Post’s network over the next ten years. At the same time, costs keep increasing, and letters volumes, which have levelled out over the last five years, are forecast to decline in future years.”
In April, Australia Post revealed its new business direction, entitled Future Ready, announcing the creation of four new strategic business units: Postal Services, Retail Services, Distribution and Express Services and e-Services.
