Australia Post Wants To Raise The Price Of A Stamp To 70 Cents

Tomorrow, Australia Post will apply to the Australian Competition and Consumer Commission (ACCC) to raise the price of standard postage stamps to 70 cents from 31 March. In an apparent attempt to stem the inevitable criticisms that bounce up whenever stamp prices change, it also wants to introduce a scheme that allows concession card holders to continue buying stamps at the current 60 cent rate.

Providing a basic postal service is a loss-making business — the "regulated mail service" lost $218 million in the 2012/2013 calendar year. Even a 10 cent rise is unlikely to absorb all of that, especially since the number of letters being sent is falling. According to Australia Post, the volume of letters sent has fallen by 1 billion items in the last five years.

The price of stamps has also not risen in line with other costs, as the announcement release explains:

Australia Post has only increased the BPR three times over the past 22 years, with the last in 2010. During this period, the price of a basic stamp in Australia has increased by 33 per cent (from 45 cents to 60 cents), whereas CPI has increased in the same period by more than 70 per cent, and most operating costs by over 100 per cent.

A 10 cent increase in the price of stamps would make absolutely no difference to my life, but is bound to lead to complaints about how people "doing it tough" and pensioners will be disadvantaged by this change. Australia Post is proposing to introduce a "Concession Stamp Rate", available to pensioners, the unemployed and low-income earners. In effect, if you have a current government concession card, you'll be eligible to purchase cheaper stamps. Australia Post proposes to hold the price of concession stamps at 60 cents until 2017. It says 5.7 million Australians will be eligible for the concession.

While this sounds like a worthy move, there are some obvious difficulties. People who want to buy those stamps more cheaply have to apply for a separate Australia Post concession card — you can't just show your existing eligibility card. I also imagine that you'll have to show up with letters and have them stamped — otherwise what's to stop a pensioner buying cheap stamps and passing them on to friends and family?

Either way, those added layers of administration are going to be costly. We won't know the details until the submission is actually lodged with the ACCC, but introducing a price rise which subsidises a small proportion of the population for a product everyone is using less and less seems questionable.

The ACCC has to approve any changes to standard postage rates, and it doesn't always wave the changes through without seeking changes. Australia Post has already announced plans to put up the price of PO boxes next month, a change it doesn't require approval for. Do you think this one should go through?


Comments

    Why not put it up to a dollar...? I posted maybe a handful of letters in the last couple of years, so a dollar isn't that big a hit, and it might actually stem some losses. As for concession card holders getting cheaper postage, that's just bloody ridiculous.! Even pensioners have to move with the times, and then there's the hassle and the fact that your letter will point you out as a concession card holder which is kinda ridiculous too...!

    Last edited 30/01/14 8:50 am

      A side effect of that might mean that businesses stop being so liberal with the amount of paper mail they send - last week I received three letters from the same institution, all of which had no useful or actionable information in them.

      There was a great "Freakonomics" podcast discussing the US postal service, and how if it was going to survive, it needed to have recognised the potential impact of the internet on their services (which, in fairness, was pretty damn hard to predict). The same is really true of AusPost.

      Last edited 30/01/14 9:09 am

        Yep, we might actually save a few trees in the mix...! :)

        We'd love to use less mail, but the government department that regulates our areas has issues with email and texting. If we want them to recognise our communication with clients as valid, we have to send things by mail or fax. No attaching high-quality scans to emails, no cloud document storage, just fax and paper.

          And the hilarious part is that nothing gets sent registered. No proof of delivery either way, so it's not legally binding.

          Actually the argument about the American Postal Service suggested that one way for them to make the 21st century would be to lend their name to a "certified" email system. Banks, the government, and companies sending important or confidential documents could have the email verified and certified as safely delivered to the recipient. They could do this all for a pretty small cost to each business ($0.50 per email?), and make it comparable to actually sending a paper letter.

          It actually seems like a logical idea - someone posted an email from their bank on reddit the other day, pointing out that even though it was genuine email, it looked counterfeit. This would get around it.

          Of course, to really work it would have needed to be implemented in the early internet days. To work now, it would require a complete paradigm shift.

            It's not really possible to certify email delivery with 100% confidence without some equivalent of a signed acknowledgement of delivery.

            Mail clients (quite rightly) do not forcibly honour all reply or read receipt requests, and workarounds involving embedded URLs don't work if the mail client is not configured to follow embedded links (which, again, is a reasonable thing to do). (If you don't see why this is reasonable, consider that most email received by many people consists of spam.)

            Even if a link is followed or the mail is flagged as "read" it can be an automated agent doing the reading of following the link.

            There are systems to authenticate that an email came from the correct company's servers, but not all companies use or honour these systems and they are sometimes implemented in a broken fashion. The Internet being what it is, many of the standards involved are largely voluntary and there is a lot of broken and misconfigured software out there.

            Last edited 01/02/14 6:59 pm

              It's possible you misunderstand what I meant.

              I understand that implementing a "verified email" into our current system is difficult, bordering on impossible. It's no great secret that email has some pretty big flaws, but it's what we've got and, frankly, it's good enough.

              The point was more that USPS/AusPost could have implemented a system before email was mainstream. Switching people from a current system is always difficult, you need to get in early. Of course, this relies entirely on a 100+ year old company betting on a then unproven and relatively unused technology.

              Coincidentally - a bunch of people have tried to make a "certified" email system a few times. It relies on them creating a whole new system, rather than trying to meld into the current system. It's actually a pretty basic business principle - you find something that people do for free, improve it, and then sell it.

      Just because you don't use a service doesn't mean it should go up for others.

        It was an alternative argument mate not a manifesto of intent...!

    I don't understand the concession card thing. I can buy a 5c stamp now if I want without a concession card. How will the Post Box or Mailing Centre know if the letter was posted by a card holder unless of course there a "Special" 60 cent stamps that can only be purchased on production of the card.

      I assume it will simply allow holders to purchase 70c stamps for 60c.

    @timmahh I'd be happy to pay a dollar for a stamp too - I rarely send anything except a few b'day cards a year - that's about $10 a year on postage stamps - hardly expensive.

    As for concession card holders getting discount, seems a plausible idea, I don't think it would point people out as concession card holders, just because they hand over 60c at the register they should still be given a 70c stamp in return - no different from scanning your loyalty card at whatever store and getting 5% 10% 20% off.

    However, the fact that they intend to make you get an AusPost Concession Card is ridiculous. They should cut their admin costs and just accept whatever card they already have (Seniors, Low Income etc)... Who cares if they palm off a few stamps to their friends / family!

      Yeah I see your point, the problem is, that concession card holder would need to go the post office and present their card to get their stamps, which may not be as convenient as say, their local corner shop/newsagent etc... Still gonna be a burden placed on people who don't need more hassle in their lives. Certainly not for the sake of 30c stamp. Then there would be the inevitable rorts, where concession card holders buy stamps cheap and sell 'em on to others... :)

      Last edited 30/01/14 9:37 am

    Why does Australia Post need to make a profit?
    Assuming ongoing maintenance and updating costs are budgeted for, and provided the Parcel Service remains price competitive, what's the problem with the Parcel Service subsidising the Mail Service and AusPost breaking even (roughly)?

      Well... They already make a profit, $312 MILLION in fact which is up 10.9% from the previous year.
      There are only two parts of AusPost that make a loss, but in turn they make a net profit.

      Rather than throwing out the baby with the bathwater, maybe they need to think of regular mail as a loss leader. If they were to get rid of just the loss making business units, the others would suffer and in turn would lose more money than they are now.

    Another thought about the stamp discount is that stamps are considered legal currency, or at least still were around a year ago when i saw a piece about it, if you are to sell the 70c stamp at 60c for some people the 60c stamp can't be the same face value 70c stamp it would need to be a different stamp that only had a value of 60c.

    So then that's another set of stamps AusPost have to produce, and what is the cost of that?

    I'm actually very sceptical that the volume of letters sent has diminished that much. Especially with the amount of junk mail we receive, and the fact that 4 post offices in the area are always packed with people sending things, including letters, cards, etc.

    I myself do cardmaking as a hobby, as do many people and also know some calligraphers etc - which means I post a few cards/letters a week, and know many others who do. So yeah I'm just finding it a bit hard to believe they could be loosing that much business and money.

      Stamps are not legal tender.

      http://banknotes.rba.gov.au/legaltender.html

      According to the Australian Constitution, s 115[4] which states: "A State shall not coin money, nor make anything but gold and silver coin a legal tender in payment of debts."

        Sounds a bit out of date, considering our coins are no longer actually made of gold or silver, and we also have notes that count as legal tender too.

        Read the bottom of the page where is says its a guide and in no w is anything on the page legally binding.

          Please, do find where it says stamps are legal tender rather than quoting posts on Whirlpool.

    Only reason it has become a loss making is that the huge amount of items coming from China have to be delivered at no cost by Aus Post. How much do they make from items going to China?Probably less than 5%.
    As an eBay seller I am competing against Chinese sellers that can sell and post "for free" at a price less than my wholesale cost. Some equity in the international postal agreements needs to be make, as when the agreements were made it was a vastly different economic world.

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