- 14 November 2019
- Transport / Logistics Services
Australia Post’s application to increase its basic postage rate (BPR) from AU$1.00 to AU$1.10 is likely to be approved by the government. The Australian Competition and Consumer Commission (ACCC) has indicated it will not object to the proposals.
Though the BPR and a few other things are set to be increased, Australia Post will not be increasing the charges on propriety labels, concession stamps or stamps for seasonal greetings cards.
“We are satisfied that the proposed price increases are unlikely to result in Australia Post recovering more than its cost of providing monopoly letter services, given the forecast decline in letter volumes,” ACCC Commissioner Cristina Cifuentes said.
As part of the decision making process the ACCC looked at how Australia Post had driven efficiencies into the network before asking for postal price increases.
“Although Australia Post has exceeded the efficiency targets it set for its monopoly letter services in 2015, it has not yet attained the efficiency levels of comparable overseas postal operators, but is on a path to bridging the gap,” Ms Cifuentes said.
“The ACCC will continue to monitor Australia Post’s progress in this area in considering any future proposal for price increases.”
Bob Chizzoniti, Director of Post Office Agents Association Limited (POAAL), welcomed the decision saying: “The letters service must be self-funding, and not subsidised by revenues from other parts of Australia Post’s business.”
POAAL released a statement explaining: “In the absence of volume growth it is difficult for Australia Post not to seek price increases to offset its growing costs. Other national postal operators have taken different routes to reduce delivery costs, however some of those strategies aren’t available to Australia Post.”
The ACCC will release a final decision after it receives a formal price notification from Australia Post. This is expected to occur in December 2019.