Australia Post has applied to the Australian Competition and Consumer Commission seeking to increase the price of a basic postage stamp from 55c to 60c and raise prices and boost its charges for business mail.
The price rises, which Australia Post wants in place by early 2010, would be the second price rise in as many years – the price of a basic stamp jumped from 50c to 55c in September 2008. But Australia Post’s group manager of letters, Allan Robinson, argues that it is only the third price rise in 18 years.
As well as the 9% rise in the basic stamp price, Australia Post wants to increase bulk mail charges by an average of 2.8c. Charges for small letters would rise 2.6c, while charges for bulk letters would rise 5c.
Australia Post is blaming the jump on Australia’s growing population and urban sprawl. Robinson claims that rapid growth in areas like western Sydney, south-east Melbourne, south east Queensland and parts of Western Australia will add 2.5 million new delivery points over the next decade.
“This growth is the equivalent to another Queensland or nearly four Adelaides being added to Australia Post’s network over the next 10 years. At the same time, costs keep increasing, and growth in letters volumes has levelled out over the last five years, with a fall this year in line with general economic conditions.”
One industry that will bear the brunt of the price rises is the direct marketing sector. Steve Pickering, owner of Brisbane mail house DMO, says he isn’t happy to see another price rise so soon after the previous one.
“It is the cause of some frustration because you have to pass it onto your client, but of course the client has to pay the higher price if they do it themselves.”
What particularly frustrates Pickering is the fact that the price rises will be passed on to mail houses that are designated as Australia Post’s bulk mail partners. These mail houses deliver their mail to Australia Post completely packed and sorted to Australia Post specifications.
“The mail houses are doing a lot more of the work, but they won’t get any price relief. That’s where it’s going to hurt us.”
Of course, Pickering knows he doesn’t have much choice but to accept any price rises.
“We’ve just got to go along with it because at the end of the day, it’s a monopoly.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
