The ACCC is seeking feedback from businesses and consumers on Australia Post’s draft proposal to increase its basic postage rate by 20 cents from mid-2025.
Australia Post’s proposed change would increase the price of delivering reserved ordinary small letters and ordinary large letters as below.
Current price | Proposed price | |
Ordinary small letter (BPR) | $1.50 | $1.70 |
Ordinary large letter | ||
Up to 125g | $3.00 | $3.40 |
Over 125g and under 250g | $4.50 | $5.10 |
Australia Post is also proposing to increase the prices of a range of its other reserved letter services, including the price of priority labels by 30 cents, from $0.70 to $1.00. Combined with the proposed regular stamp price increase, priority ordinary small letters are proposed to increase by 50 cents, from $2.20 to $2.70.
Australia Post is not proposing to increase the price of concession stamps (60 cents each) or stamps for seasonal greeting cards (65 cents).
The ACCC is required to assess the proposed price increase in accordance with the Competition and Consumer Act (CCA) and then notify Australia Post on whether it objects to the proposal.
The ACCC does not have the role of approving the proposed price increase.
When assessing the proposed price increase, the ACCC will consider Australia Post’s recovery of efficient costs, including a reasonable rate of return, and how the company’s common costs are allocated to the relevant letter segments. In forming its view, the ACCC will consider the responses received during this consultation period.
Australia Post has set out the reasons for its proposed price increase in its draft price notification and supporting materials, which is available on the ACCC website.
Australia Post has also indicated that it proposes to submit price notifications to the ACCC for further price increases in July 2026 and July 2027 as part of a future price path for stamped letters.
The ACCC is not assessing these proposed price increases as part of this price notification process.
“We are seeking views from consumers, businesses and other stakeholders about Australia Post’s proposed price increase in 2025,” ACCC Commissioner Catriona Lowe said.
“We will then examine the information provided by Australia Post and the feedback received in the context of our role under the legislation.”
Following the consultation process, the ACCC will release a preliminary view on the draft price notification in early 2025. Australia Post may then lodge a formal notification of a price rise with the ACCC.
In addition to the ACCC’s assessment, Australia Post must also give written notice of the proposed price increase to the Minister for Communications. It can only increase the basic postage rate if the Minister does not disapprove the proposal within 30 days.
Consultation on the proposed price increase, including a simple and short survey, is now open and closes on 22 December 2024.
Australia Post will submit further documents in support of its draft price notification by the end of November 2024. This information may be relevant to stakeholders’ survey responses and submissions on the proposed price increase. The ACCC will update its Australia Post draft price notification page with this information as it becomes available.
Further information, including Australia Post’s draft notification, is available at Australia Post – letter pricing 2024.
Background
Under the CCA, the ACCC is responsible for assessing proposed price increases by Australia Post for its reserved ordinary letter services delivered to its regular timetable. The ACCC must consider Australia Post’s proposal to increase the price of these services and may decide to:
- not object to the price increase
- not object to a price that is less than that proposed, or
- object to the price increase.
It is not the role of the ACCC to approve any proposed price increase under the Australia Post price notification framework. Only the Minister for Communications has the power to approve or reject a price increase proposed by Australia Post.
Australia Post provides a range of services including the delivery of letters and parcels as well as various financial and retail services. Some of these services are ‘reserved’ to Australia Post. According to the Australian Postal Corporation Act, Australia Post has an exclusive right to the collection and delivery of letters within Australia, subject to certain exceptions.
Australia Post’s ordinary letter services – a subset of its reserved services – are declared as ‘notified services’ under the CCA. Australia Post cannot increase the prices of these notified services without notifying the ACCC and the Minister for Communications of its intentions.
The lodgement by Australia Post of a draft price notification provides the ACCC with time to undertake a public consultation process and economic assessment of the proposed increase. The ACCC will publish a preliminary view on Australia Post’s draft price notification early next year.
After the publication of the ACCC’s preliminary view, Australia Post may decide to lodge a formal price notification. If it does so, the ACCC must make an assessment within 21 days and provide Australia post with notice of its assessment. Australia Post cannot increase prices during the 21 day period. It may only increase the price if the Minister doesn’t object to the increase.
The last price notification from Australia Post considered by the ACCC was in 2023, and prior to that in 2022.
While the ACCC did not object to Australia Post’s last price notification, it made a series of recommendations in its March 2024 decision regarding Australia Post’s cost allocation model, forecast data and provision of regulatory information. The ACCC will carefully assess Australia Post’s implementation of these recommendations during the current price notification process.
In 2023, the Australian Government launched a review into the modernisation of postal services. The Department of Infrastructure, Transport, Regional Development, Communications and the Arts published a final outcome on the review that included a package of reforms to modernise Australia Post announced by the Government on 6 December 2023.
As a result of these reforms, consequential amendments to the Australian Postal Corporation (Performance Standards) Regulations commenced in April 2024 to:
- reduce the performance standards for letter delivery frequency from every business day to every second business day (whilst parcels are still delivered daily), and
- relax the performance standards for regular letter delivery timetables by one business day, and
- remove the performance standards for the delivery of priority letters.
The Government also noted that it would work with Australia Post to develop a pricing oversight mechanism that will give Australia Post and its customers more certainty over a longer-term price path for basic postage.
