Australia Post is considering a price increase for letters and stamps in response to ongoing financial challenges. The national postal service has been grappling with a decline in letter volumes, prompting the need for adjustments to its pricing structure.
According to 7news, these proposed changes are seen as a way to offset mounting losses. The Australian Competition and Consumer Commission (ACCC) has reviewed the suggestions and, while not likely to oppose the increase, will continue to assess the impact on both consumers and the overall postal network. The final decision is expected after further consultations.
Decline in Letter Volumes and Financial Losses
The decline in letter volumes is a global trend that has impacted postal services worldwide. As Australia Post noted,
The decline in letter volumes is a trend happening across postal services globally.
In the first half of 2025, Australia Post reported a 10.6% drop in letter volumes, leading to a loss of $83.7 million in its letter service.
The proposed price increase will help Australia Post address losses in this part of the business as it continues to deliver for its customers and communities,
Australia Post said in a statement. To cope with this, the postal service has suggested a price increase of 20 cents for ordinary letter services, which will raise the Basic Postage Rate from $1.50 to $1.70.
ACCC’s Role in the Pricing Review
The ACCC, which regulates pricing for Australia Post’s reserved services, has stated that it is unlikely to object to the proposed price increases. However, the commission emphasized that even with this increase, Australia Post is unlikely to recover revenue in excess of efficient costs for its reserved letter service.
In assessing the draft price notification, the ACCC found that Australia Post is not likely to recover revenue in excess of efficient costs for its reserved letter service—even with the proposed price increase – the ACCC said.
The commission had previously made recommendations regarding Australia Post’s cost allocation model and its forecasting data, which will influence future pricing decisions.
Impact on Consumers and Ongoing Consultations
The average Australian household purchases around five to six full-rate stamps each year, and the proposed price increase would result in an additional cost of $1.20 annually per household.
Australia Post has committed to providing at least 30 days’ notice before the price changes take effect. Despite the price hike, certain stamps, including those for concessions and seasonal greetings, will remain at their current rates of 60 and 65 cents, respectively.
Australia Post also emphasized that
Australians will continue to have some of the lowest stamp prices in the OECD and, with this increase, the basic postage rate will have risen by just 70 cents in the past eight years.
Additionally, the company pointed out that
Costs to deliver letters continue to increase, with more than 200,000 extra delivery points added across our delivery network each year.
ACCC Recommends Improvements to Australia Post’s Cost Management and Efficiency
In its latest evaluation, the ACCC has recommended improvements in Australia Post‘s cost allocation processes, the accuracy of forecast data, and its delivery time standards.
These recommendations aim to ensure greater efficiency in Australia Post’s operations, which are essential given its statutory monopoly over reserved letter services. As the ACCC explained,
These recommendations are important because of Australia Post’s statutory monopoly over reserved letter services in Australia.
Since Australia Post does not face competition for these services, the ACCC’s recommendations seek to ensure rigorous cost management.
Given that it is not subject to competition in relation to these services, which would drive it to deliver them efficiently, the ACCC’s recommendations seek to ensure rigour in the way that Australia Post incurs and accounts for its costs.
The commission will review how these changes are implemented before making further pricing decisions.
Australia Post, as a self-funded government business enterprise that receives no government funding, is focused on responsibly addressing its financial challenges so it can continue to meet the evolving needs of Australian communities.
As a self-funded government business enterprise that receives no government funding, Australia Post is focused on responsibly addressing its financial challenges so it can continue to meet the evolving needs of Australian communities – the company stated.
The ACCC has opened a further consultation period, which will conclude on May 12, 2025, to finalize its assessment of the proposed price increases.
