ACCC assessing proposal to increase the basic postal rate and other mail service prices

The Australian Competition and Consumer Commission is assessing a proposal by Australia Post to increase the price of a number of mail services, including an increase in the basic postage rate from 50 to 55 cents.

Increases in the price of other mail services include large and small ordinary letters, large and small pre-sort ordinary letters, clean mail, reply paid mail, impact mail and local delivery mail.  

"The ACCC is currently conducting a rigorous assessment of the price increases proposed by Australia Post," ACCC Chairman, Mr Graeme Samuel, said. 

"The ACCC will consult widely on the proposed price increases. An issues paper will soon be released seeking the views of interested parties on key issues to assist the ACCC in its assessment of Australia Post's proposal."

The proposed price increases are the first for the basic postage rate and other ordinary letters since January 2003, and first general increase to pre-sort letters since January 1992.

The issues paper and documentation detailing Australia Post's proposal will be available on the ACCC's website.

Background

Under the prices surveillance provisions of the Trade Practices Act 1974 the ACCC has a role in assessing proposed price increases for declared services.

Certain services 'reserved' to Australia Post under the Australian Postal Corporation Act 1989 are declared for the purposes of the Prices Surveillance provisions of the TPA.

In recognition of Australia Post's community service obligations (which oblige Australia Post to carry and deliver standard letters at a universal rate to anywhere in Australia), it has been granted a general monopoly over reserved services.

The reserved services extend to:

• the collection, within Australia, of letters for delivery within Australia
• the delivery of letters within Australia
• the exclusive right to issue postage stamps within Australia.

There are a number of exceptions to the reserved services, including letters weighing more than 250g and letters that are carried for a charge more than four times the basic postal rate.