ACCC not opposed to basic postage increase

The Australian Competition and Consumer Commission (ACCC) today released a preliminary decision not to oppose an increase in the basic postage rate.

Australia Post applied to increase the basic rate from 45 cents to 50 cents in April this year. If approved, the increase would be the first in 11 years.

Australia Post’s Group Manager of Letters, Gary Lee said the ACCC found that ordinary letters appear to be currently priced below cost.

“The ACCC also acknowledged the significant cost savings and productivity gains made by Australia Post in recent years as well as the practicality of a five cent increase,” Mr Lee said.

Mr Lee said that during the period that the basic postage rate has remained unchanged, the consumer price index has risen by more than 30 percent.

“The proposed five cents increase represents a rise of 11 percent and compares with a 100 percent increase in the price of a litre of milk and a 50 percent rise in the price of a loaf of bread over the last 10 years,” he said.

At 50c, Australia’s basic postage rate would still be one of the lowest in the developed world. By comparison, Canada’s basic rate is the equivalent of 53c; France 61c; Germany 76c; Italy 66c; Japan 71c and the UK 54c.

The ACCC report also includes its preliminary view not to support proposed price increases to business pre sort mail.

Australia Post has until 27 September to respond to the ACCC’s preliminary view. A final decision is expected in October.

If approved, the basic postage rate rise, from 45c to 50c, would apply from January 2003.