Australia Post looking to increase basic postage rate
Australia Post has today (28 August) lodged a draft notification with the Australian Competition and Consumer Commission (ACCC), seeking an increase in the Basic Postage Rate (BPR) from 70 cents to $1. Today’s move follows on from Australia Post’s announcement in March that it would seek to lift the BPR to $1 to apply to a new Regular letters service for consumer mail.
In an official statement announced the notification, Australia Post said: “Consumers will be supported, with the concession stamp price frozen at 60 cents for 5.7m concession cardholders and the price of a Season Greeting stamp frozen, for all Australians, at 65 cents. Together, Concession and Season Greeting mail accounts for almost half of all mail sent by consumers.”
Australia Post went on to explain why it believed that a hike in BPR was necessary: “Mail volume – of which 97% comes from business and government – continues to decline and the letters service has accumulated losses of more than $1bn over the past seven years. While the planned BPR increase and service changes will reduce the losses, they will not return stamped mail to profit.
“The changes will keep post offices open – including Australia Post’s vital regional and rural network – keep posties delivering five days a week and ensure Australians everywhere can still access a world-class delivery service.”
Australia Post added that business and government customers will continue to receive volume incentives at the same level as they do now, relative to the full rate.
Assuming it is given the green light, the BPR increase is expected to be implemented in January 2016.
The announcement from Australia Post has met with a mixed reaction.
The Post Office Agents Association Ltd (POAAL) saw it as part of “Australia Post’s push for a two-speed letters service”.
The POAAL added that “several LPO payments are linked to the price of the postage stamp”, so “when the price of postage goes up, those payments increase”. This includes payments for sorting mail and payments for PO Boxes, said POAAL.
“Our members can see that a price increase will give their businesses a short-term boost, but they are worried what the long-term effect on stamp sales might be,” says POAAL Director Bob Chizzoniti. “I have spoken with many Licensees from all over Australia over recent months, and they all share these concerns.”
POAAL claimed that licensees are concerned that the slower “regular” service might “hasten the decline in letters volumes”.
Chizzoniti added: “We are disappointed that Australia Post has waited until losses in letters were so large before acting. POAAL had preliminary discussions with Australia Post some years ago to discuss possible reforms to the letters business, but Australia Post management had their fingers in their ears.
“POAAL had sought a managed transition, where the entire Australia Post business would be able to transform before the losses in letters reached a critical point.”
