Stamp price hikes coming next month after watchdog decision

Australia Post stamp price hikes of up to 60c per letter can be expected from next month after the national consumer watchdog announced it would not oppose the changes.

The Australian Competition and Consumer Commission (ACCC) today said it will not object to Australia Post's 13.3 per cent price increase, which is now slated to take effect from July 17.

Under the new price system, basic postage rates will rise from $1.50 to $1.70 for small letters, from $3 to $3.40 for ordinary large letters (weighing up to 125g) and $4.50 to $5.10 for the largest letters (up to 250g).

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The price of concession stamps and seasonal greeting cards won't change.

"We understand that these price increases will mean extra costs for consumers. However, our decision to not object to Australia Post's proposed price increase is based on evidence that the costs to Australia Post of providing the letter service are greater than the revenue it produces," ACCC Commissioner Anna Brakey said.

Brakey said Australia Post has incurred "significant losses" on its letter services over the past few years.

On average, the national postal service only delivers around two letters per household each week.

Letter volumes are also expected to plummet by another 10.6 per cent until 2028.

The ACCC has found it unlikely that Australia Post will recover its letter revenue, even with the proposed price increase.

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"Our final decision recommends Australia Post examine ways to alleviate affordability issues for businesses, including those subject to requirements to send physical mail," Brakey added.

"Further we made recommendations to address a number of other concerns expressed by stakeholders during consultation.

"We are especially mindful of the impact price changes can have on vulnerable Australians, and so our decision paper recommends that Australia Post increases the number of concession stamps per customer, which is currently capped at 50 per year."

Brakey noted the price increase of $1.70 for a single postage stamp is still below the median price of $1.93 for private postal operators.

Australia Post first proposed the price hike in November last year.

While the consumer watchdog did not have the authority to approve the proposed increases, it can object to the plan.

Unless rejected by the federal minister for communications, stamp prices are expected to increase from July 17.

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