Postal Tariff Rise Too Low for Growth
THE SA Post Office has warned that the lower-than-expected 9% postal tariff increase for this year will adversely affect development programmes, and will mean that mail volumes are unlikely to see a return to growth.
The organisation had requested a 12%-15% hike in tariffs in the hope that the ailing entity could improve its revenues and grow the business.
The approved 9% tariff increase means the cost of a standard letter will go up to R1,52 from R1,40.
The Democratic Alliance (DA) slammed the 9% increase yesterday as contravening policy.
DA spokesman Mike Waters said the Post Office’s licence agreement stated clearly that postal tariff increases could not exceed the consumer price index, which the finance minister projected at 6,9%. “How can the minister blatantly ignore (the) unambiguous terms of the licence and defy the minister of finance?”
The communications department said Communications Minister Ivy Matsepe-Casaburri took a final decision on the tariff increase “after considering various socioeconomic factors”.
Post Office spokesman Bernard Magabe said yesterday that the organisation had hoped for a higher increase, but would have to live with the 9% the minister had allocated.
He said a meeting with Matsepe-Casaburri and the postal regulator would be sought to discuss the effect of the lower increase on the Post Office’s development programmes. “We need to see how to fund them.”
The projects included improving delivery systems, rolling out street addresses to previously disadvantaged areas and increasing postal addresses in underserviced areas.
Magabe said mail volumes had been falling in recent years and the Post Office was putting in place a range of measures to try to grow volumes again. The latest tariff increase meant management would be able to maintain the business as it was, but it was unlikely to lead to growth.
Waters said the Post Office would also lose out on revenue, as the tariff increases should have been announced by no later than January 31.
A 60-day notice period would have followed before the new tariffs took effect on April 1. Yesterday’s increase would therefore be effective only towards the end of April, he said.
The proposed tariff hike has been controversial, with small and big users expressing outrage at the proposed above-inflation increase.
The Post Office reached a compromise with industry officials last month, involving bulk users receiving big discounts, and smaller users likely to bear the brunt.
The Post Office had said the above-inflation increase was necessary as its expenses had been driven up due to rising transport and labour costs, which made up a big portion of its overheads.
The Post Office had said the above-inflation increase was necessary as its expenses had been driven up due to rising transport and labour costs, which made up a big portion of its overheads.
by Robyn Chalmers
Copyright Business Day. Distributed by All Africa Global Media(AllAfrica.com)
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