Australia Post will increase the costs of postage stamps to 60 cents, with the Australian Competition and Consumer Commission (ACCC) not objecting to the increase.
Australia Post had previously tried to increase postage stamp costs from the current 55 cents to 60 cents last year, but was rejected by the ACCC with concerns that Australia post had not proven its case and that costs should have dropped due to the GFC. Australia Post then made another attempt to increase prices in April, which initially was ‘concerning’ for the ACCC, but after review Australia Posts’ case has passed the ACCC’s scrutiny and 60 cent stamps will come into effect from the 28th of June this year applying to Small, Large and PreSort letter services..
The ACCC has a role in assessing proposed price increases for ‘declared’ services where Australia Post has a statutory monopoly, including certain services that have been ‘reserved’ under the Australian Postal Corporation Act in recognition of Australia Post’s community service obligations.
“In 2009, the ACCC objected to Australia Post’s proposed price increases due to concerns that Australia Post’s costs were not falling in response to declining
volumes,” ACCC chairman Graeme Samuel said today.
In its statement the ACCC believes Australia Post to be in the early stages of cost reduction strategies, but believes further cost reductions are necessary. The ACCC is of the view that there is currently significant pressure on Australia Post’s reserved service revenue streams and even with the proposed price increases and an efficient reduction in costs, the ACCC believes that Australia Post still faces a loss on its reserved services, as such the ACCC has not objected to Australia Post’s proposed price rises.
“However, based on the current forecasts of letter volumes and costs, the ACCC considers that no changes to the basic postal rate should be required for the next two years beyond those proposed for June 2010,” Mr Samuel said.
