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Australia Post pushes to increase stamp price to 10c to ‘protect’ service

Aug 07, 2019

Australia Post has lodged a draft notification with the ACCC seeking an increase in the basic postage rate from $1 to $1.10. Source: Getty

Australia Post has received a brunt of criticism in the past for a series of scandals and now the company is risking the wrath of Aussies once again as is proposes a plan to increase the price of stamps.

The national postal service has thrown itself into the firing line and lodged a draft notification with the Australian Competition and Consumer Commission (ACCC) seeking a boost in the basic postage rate from $1 to $1.10 – to apply from January 2020.

If it goes through, it will be the first price rise in four years when stamps rose to $1 in 2016.

The proposed increase will apparently help keep post offices open across the country and posties delivering five days a week, with Group Chief Executive Officer and Managing Director Christine Holgate claiming it’s necessary to protect the service overall.

To make it easier, Holgate said the 60 cent price of concession stamps would be protected and available to 5.7 million Australians, including pensioners and veterans and the 65 cent seasonal greeting card stamps will stay the same.

“In the last financial year, we delivered a profit in line with that three years earlier,” she explained in a statement released on Wednesday. “We did this with 820 million less letters delivered to over 700,000 more homes.

“Our posties deliver to more than 12.1 million addresses across the country. It doesn’t matter if they have one letter or 100 for the address, they still need to drive past the letterbox each day. Last year our letters business lost $190M – this is after the benefit of significant efficiency savings. It is important that we responsibly address pricing if we are to protect this important service and keep our network of community post offices open.”

Speaking about the proposed changes, ACCC Commissioner Cristina Cifuentes said they are considering various issues and trends in the postal industry and whether Australia Post has explored other options before increasing prices.

“We will welcome submissions on this proposal and will take into account the views of industry stakeholders, consumers and Australia Post itself,” she explained.

However, the ACCC actually doesn’t have the right to approve the proposed price increase and will instead assess the proposal in accordance with the Competition and Consumer Act 2010 and then notify Australia Post on whether it objects to the increase. In addition to the ACCC’s assessment, Australia Post must give written notice to the Minister for Communications of its intent to vary its rates of postage.

Australia Post is only able to increase the basic postage rate if the minister does not disapprove the proposed increase to the basic postage rate within 30 days. The ACCC intends to release its preliminary view on Australia Post’s draft proposal in November.

The announcement comes weeks after it was reported Australia Post has enlisted the help of a crisis management specialist to rescue the company from its downward spiral, following a spate of service scandals and ongoing backlash across the country.

The postal delivery service’s CEO Christine Holgate welcomed former AMP boss Catherine Brenner’s crisis specialist Sue Cato to the team in hopes of saving the company from further turmoil, The Australian reported at the time.

According to the news outlet, Cato – who is reportedly regarded as one of the most experienced advisers in corporate Australia – will be somewhat of a lifeline for Australia Post, which has battled with a spate of scandals in the past.

Things have become so challenging that The Australian reported the company is “slipping into the red” and is “currently crawling with cost-cutting consultants” from advisory and investment firm KordaMentha.