Australian Competition and Consumer Commission (ACCC), a consumer regulator in the nation, has suggested that it would not oppose Australia Post's proposal to hike stamp costs by as much as 25% while seeking stakeholder comments.

Australia Post, the country's postal service, stated last year that pricing for reserved ordinary letters sent under the usual schedule would be altered starting in January following a $384.1 million net deficit in the letters sector for the 2023 fiscal year.

Price Hike for Stable Finances

According to the adjustments, regular small letter stamps from Australia Post will now cost $1.50 instead of $1.20. The price of regular big letters up to 125g with a stamp would be $3, up from $2.40, while the price of larger letters between 125-250g with a stamp would be $4.50, from $3.60.

The typical Australian writes about 15 small letters a year, so the price hike would amount to an extra $4.50 monthly.

Both the concession stamp and the seasonal greetings stamp will remain unchanged in price.

Having reached the preliminary conclusion that it would not raise objections to Australia Post's plan, News.com.au reported that the ACCC is now collecting stakeholders' comments, according to the regulator's statement.

The regulatory body expressed doubt that the corporation would be able to recoup more money than it spent on reservations for postal services. "Our assessment found that Australia Post's proposed price increase is unlikely to produce surplus revenue for the reserved letter service over the coming years," said Mick Keogh, deputy chair of the ACCC.

Notably, Australia Post said that the organization was making adjustments to ensure its continued financial stability. Paul Graham, group chief executive officer and managing director, stated: "As we are entirely self-funded and receive no ongoing government funding, we need to ensure we reduce losses in our letters business."

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Impacts of Digital Communication

Annual growth in the number of delivery addresses is projected at around 200,000, but the number of letters sent is projected to decrease at a rate of 11.3% from 2025 to 2026.

Despite the importance of Australia Post's routine letter delivery as a national service, ACCC's Keogh warned that the company is facing financial challenges due to the rise of digital communication.

"We're very conscious of the cost-of-living pressures currently affecting Australians ... We acknowledge that the stamp price increase will have some impact on consumers and small businesses. We consider that Australia Post should explore affordability measures for small businesses reliant on the letter service."

Australia Post has received several suggestions from the ACCC to enhance its cost allocation strategy, record keeping, and information sharing.

Responses to the preliminary view paper may be submitted until February 15. The ACCC will consider these factors before reaching a conclusion.

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