The price of stamps could rise by more than nine percent as Australia’s postal service struggles to deal with rising operating costs and a declining number of letters being sent.
Australia Post is seeking to increase the cost of stamps from $1.10 to $1.20 from January next year, and is asking the country’s consumer watchdog to weigh in on its draft proposal.
It would mean a price increase of 10 cents to the basic postage rate.
Reserved ordinary large card prices would also increase from $2.20 to $2.40 for cards up to 125g and from $3.30 to $3.60 for cards between 125g and 250g.
Australia Post CEO and Managing Director Paul Graham said the proposed change was necessary to help the company continue its essential service, especially in rural and remote Australian communities.
The company says the price increase would help manage rising operating costs and declining letter volumes.
“Over the last three years, the volume of letters sent in Australia has dropped by 15 per cent, or 280 million items,” Graham said.
Last fiscal year, Australia Post’s letter business lost $205.7 million.
This despite the company reporting $4.80 billion in revenue for the six months to December 2021.
Graham said the number of letters mailed across the country has dropped by 15 percent in the last three years, which equates to roughly 280 million letters.
“In fact, we are taking a loss on every sealed letter that is delivered,” he said.
The price of stamps rose from 70c to $1 in 2014 when Ahmed Fahour was the CEO of Australia Post.
In 2019, Christine Holgate increased it again to $1.10.
The Australian Consumer and Competition Commission (ACCC) said it was calling for the Australia Post’s draft proposal to be submitted.
When a price notification is submitted, the watchdog is generally required to make an assessment within 21 days of submission.
“Australia Post must also give written notice to the Minister for Communications of its intention to vary its postage rates and can only increase the base postage rate if the Minister does not disapprove of the proposed increase in the base postage rate within 30 days” , an ACCC spokesman said.