Why you will soon be paying more to send a letter: Understanding Australia Post’s price increase

Sending letters will soon come with a slightly higher price tag for Australians, after the Australian Competition and Consumer Commission (ACCC) recently approved a 25 per cent increase in the cost of stamps.

The hike, set to take effect in April of this year, is aimed at ensuring the financial sustainability of Australia Post amid evolving postal demands and challenges.

Under the approved proposal, the price for reserved ordinary letters delivered to the regular timetable will rise from $1.20 to $1.50 for ordinary small letters. Additionally, Australia Post intends to increase prices for ordinary large letters, with weights up to 125 grams, from $2.40 to $3.00, and for those between 125 and 250 grams from $3.60 to $4.50.

However, there is some relief for certain groups. Concession stamp prices will remain unchanged, staying at 60 cents each or 5 for $3 for eligible concession cardholders. Furthermore, the cost of seasonal greeting cards will remain steady at 65 cents.

ACCC Commissioner Anna Brakey clarified the decision, stating, “After assessing the proposal in line with our regulatory role, we don’t object to Australia Post’s proposed price increases on a cost-recovery basis.”

The average Australian sends around 15 small letters annually, resulting in an estimated expenditure of $4.50 per year due to the price hike.

In a statement made late last year, Group Chief Executive Officer and Managing Director Paul Graham underscored Australia Post’s commitment to serving all Australians, emphasising that the increase in postal rates would be essential to maintaining the organisation’s financial sustainability

“We’re committed to maintaining the letters service for communities across Australia and increasing the Basic Postage Rate will help us continue to deliver for all Australians,” Graham said.

“We’ve made a number of changes in the past year to improve and simplify our business but, as we are entirely self-funded and receive no ongoing government funding, we need to ensure we reduce losses in our letters business.”

Graham highlighted the challenges faced by Australia Post, pointing out that the business operates without ongoing government funding and needs to adapt to changing circumstances.

“Each year, our Posties are required to deliver to more households, with approximately 200,000 new delivery points added to postal rounds in the last financial year. At the same time, letter volumes continued to decline, and we expect them to halve in the next five years,” he explained.

This increase in postal rates reflects a broader trend seen globally as traditional mail services contend with declining volumes and the need to adapt to a digital age.

While the rise in stamp prices may be unwelcome news for some, it underscores the ongoing efforts to sustain essential postal services in an ever-evolving landscape.