Australia Post cleared to increase price of standard letter postage

The cost of sending a letter with Australia Post will soon cost more after the Australian Competition and Consumer Commission (ACCC) decided not to step in.

The ACCC announced on Wednesday that it would allow for the government-run postage service to increase the cost of its Basic Postage Rate (BPR) following a consultation process with businesses and consumers, launched in February.

ACCC Commissioner Anna Brakey said the decision was made as Australia Post tries to recoup losses caused by a shrinking customer base posting letters over the past two decades.

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“After assessing the proposal, we don’t object to Australia Post’s proposed price increases,” Brakey said.

“Our findings suggest Australia Post will still fall slightly short of recovering the efficient costs of providing these services, even with the proposed price increase.”

The decision will allow the BPR, the cost of sending a small letter, to raise from $1.70 to $1.85 on September 1, provided the Communications Minister doesn’t intervene.

The cost of large letters up to 125g and letters weighing between 125-250g will also increase from $3.40 and $5.10 to $3.70 and $5.55 respectively, on the same date. The ACCC had no decision over those increases.

“Australia Post is getting closer to covering its costs for reserved letter services due to recent price increases and changes to Australia Post’s delivery model,” Brakey said.

“In response to recent ACCC recommendations aimed at increasing cost transparency, Australia Post has also made improvements to how it allocates costs between reserved letter services and the competitive parts of its business.”

Australia Post estimates the change will add about 75 cents to the annual postage costs of the average household.

But the ACCC noted the increase will particularly impact businesses, with those costs likely to be passed on to customers.

“The ongoing decline in letter volumes has now reached levels not seen in Australia since the late 1930s,” Australia Post said.

“Today, fewer than 3 per cent of letters are sent by consumers, with the majority mailed by businesses and government agencies.

“As customers and businesses increasingly shift to digital alternatives, letter volumes continue to fall.

“Australia Post is not alone in facing this challenge, with this letter decline being experienced by international postal operators worldwide.”

It noted the price of seasonal greetings and concession postage stamps will remain unchanged. The annual limit to how many concession stamps can be bought has also been increased from 50 to 75.