The ACCC is seeking views on Australia Post’s draft proposal to increase its basic postage rate.
Australia Post is proposing to increase its stamp prices by 25 per cent from January 2024.
This change would increase the price of delivering reserved ordinary small letters from $1.20 to $1.50, ordinary large letters up to 125 grams from $2.40 to $3.00 and ordinary large letters between 125 grams and 250 grams from $3.60 to $4.50.
Australia Post is not proposing to increase the price of concession stamps (60 cents each) or stamps for seasonal greeting cards (65 cents).
When assessing the proposed price increase, the ACCC will consider Australia Post’s recovery of efficient costs, including a reasonable rate of return, and how the company's common costs are allocated to the relevant letter segments. In forming its view, the ACCC will consider the responses received during this consultation period.
Australia Post has set out the reasons for its proposed price increase in its draft price notification and supporting materials.
“We would like to hear from consumers, businesses and other stakeholders about their views on Australia Post’s proposed price increase,” ACCC Commissioner Anna Brakey said.
“We will then examine the information provided by Australia Post and the feedback received in the context of our role under the legislation.”
Following the consultation process, the ACCC will release a preliminary view on the draft price notification. Australia Post will then lodge a formal notification of the price rise with the ACCC.
In addition to the ACCC's assessment, Australia Post must also give written notice of the proposed price increase to the Minister for Communications. It can only increase the basic postage rate if the Minister does not disapprove the proposal within 30 days.
Consultation on the proposed price increase, including a simple and short survey, is now open and closes on 29 September 2023.
Further information, including Australia Post’s draft notification, is available at Australia Post – letter pricing 2023.
Background
Australia Post provides a range of services including the delivery of letters and parcels as well as various financial and retail services. Some of these services are ‘reserved’ to Australia Post. According to the Australian Postal Corporation Act, Australia Post has an exclusive right to the collection and delivery of letters within Australia, subject to certain exceptions.
When Australia Post lodges a formal price notification, the ACCC must make an assessment within 21 days. Australia Post must not increase prices within this period. According to the Competition and Consumer Act, the ACCC can give Australia Post a notice in writing stating that it would have no objection to the proposed increase; or that it would have no objection to a lower price increase. If the ACCC does not give such a notice, it would be an offence for Australia Post to supply the notified service at the higher price.
Given a period of 21 days is too short for an effective consultation and assessment process, Australia Post has agreed to provide a draft version of the price notification to obtain the ACCC’s view before formal lodgement.
The last price notification from Australia Post considered by the ACCC was in 2022.
In 2023, the Australian Government launched a review into the modernisation of postal services. The Department of Infrastructure, Transport, Regional Development, Communications and the Arts held a consultation process earlier this year for the review and has published preliminary insights on the feedback received.