ACCC does not object to postage price increase by Australia Post

20 February 2014

The Australian Competition and Consumer Commission has decided to not object to Australia Post's proposal to increase the prices of ordinary letter services, including the basic postage rate (BPR) from 60 cents to 70 cents.

Australia Post plans to freeze the price of a basic stamp at 60 cents until 2017 for consumers with an Australian Government concession card.

“The ACCC is satisfied that the price rises will not result in Australia Post over recovering the efficient costs of providing monopoly letter services,” ACCC Chairman Rod Sims said.

“The ACCC found that there is increasing financial pressure on Australia Post’s letter services as a result of fewer letters being sent. Australia Post is currently under recovering on its reserved services costs.  The magnitude of the under recovery is such that even with the proposed price increase, Australia Post is unlikely to recover more than an efficient level of costs.”

Under the Competition and Consumer Act 2010 the ACCC is responsible for assessing proposed price increases by Australia Post for its reserved ordinary letter services including the BPR.

The ACCC’s decision is not binding on Australia Post, but is provided to better inform the public about whether or not the proposed price increases might be more than necessary to recover an efficient level of costs for providing the reserved services.

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 may increase the BPR only if the Minister does not disapprove the proposed increase to the BPR within 30 days of receiving notification from Australia Post.

Australia Post proposes to increase postal prices with effect from 31 March 2014. The last increase in the BPR was in June 2010 when it increased from 55 cents to 60 cents.

See, Australia Post - letter pricing 2014

Release number: 
MR 028/14
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