Australia Post charges to increase and speed to drop

The Government has approved an Australia Post's request to introduce a two-speed letters service – a Priority and Regular service that will be introduced for consumers no earlier than September 2015.


The Regular service will be delivered two days slower than at present. The Priority service will be a commercial product which will be delivered to a faster timetable than the Regular service.


Australia Post will continue to deliver mail five days a week to 98 per cent of addresses, and the delivery speed will vary depending on the service.


Additionally, Australia Post has advised the Government it will apply to the Australian Competition and Consumer Commission (ACCC) to raise the regular stamp price from $0.70 to $1.00. The price of Regular letters will be overseen by the ACCC, consistent with the current practice.


Concession card holders will continue to be offered a concession rate stamp, which will be frozen at $0.60, and all Australians will continue to have access to a $0.65 Christmas rate stamp.


The Minister for Communication Malcolm Turnbull said that Australia Post is facing significant structural decline as people choose to communicate over the Internet. Australians are now sending one billion fewer letters a year than they were in 2008, with letters losses rising to more than $300 million a year.


While Australia Post has been able to offset these losses by growing its parcels business, losses in letters are now so large that they are overwhelming all profitable areas of the business. Without reform total projected company losses could reach $6.6 billion over the next 10 years, with letters losses of $12.1 billion.


The measures are expected to also help Australia Post maintain its post office network, particularly Licensed Post Offices in regional and remote communities.


3 March 2015.