Money

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?