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Australia Post Faces Backlash Over Price Hike
Starting July 17, sending letters via Australia Post will see significant price increases, sparking controversy among Australian consumers. The Australian Competition and Consumer Commission (ACCC) approved a price rise of up to 13.3%, allowing Australia Post to charge higher rates in response to mounting operational losses.
Price Changes
From next month, the costs for various letter categories will be as follows:
- Ordinary small letters: increasing from $1.50 to $1.70 (a 20 cent rise)
- Ordinary large letters up to 125g: rising from $3.00 to $3.40 (a 40 cent increase)
- Ordinary large letters between 125g and 250g: increasing from $4.50 to $5.10 (a 60 cent rise)
ACCC Commissioner Anna Brakey explained that while the hike results in higher expenses for consumers, it is deemed crucial for maintaining postal services, given that operational costs now surpass revenues.
Rationale Behind the Hike
Australia Post’s financial woes stem largely from a decline in letter-sending, a trend seen globally. Currently, the service delivers an average of just two letters per household weekly, and it anticipates a 10% annual reduction in letter volume until 2028.
Despite the adverse public response, Brakey highlighted that even with the proposed increases, the price of an ordinary letter at $1.70 remains below the median price of $1.93 among OECD postal services. Last April, Australia Post had already raised the price of sending ordinary small letters by 30%.
Public Reaction
Many Australians voiced their discontent on social media. Comments included sentiments like "What a joke!" and concerns that the increase unfairly penalises those who continue to use postal services.
"Everything just getting out of control price with everything is going up,” one user lamented, reflecting widespread discontent regarding rising living costs.
Regulatory Oversight
Before finalising its decision, the ACCC conducted a public consultation period, allowing stakeholders to express their concerns. Anika Wells, the Communications Minister, is the only authority who can halt the price increases before they take effect.
The Future of Australia Post
Australia Post has faced consecutive financial setbacks, reporting a loss of $361.8 million for the 2023-24 financial year. It stressed that unless further price hikes are implemented, these losses are expected to worsen significantly by the 2025-26 financial year.
In light of this price adjustment, the ACCC’s recommendations include increasing the current cap on concession stamps, which is limited to 50 per year per customer, to support more vulnerable Australians.
As Australia Post navigates these challenges, the upcoming price changes underscore the ongoing struggle to adapt to shifting consumer behaviours in a digital age, where traditional letter-writing is declining.
