The ACCC is seeking stakeholder feedback on its preliminary view to not object to Australia Post's proposed stamp price increase of 13.3 per cent from mid-2025.
Under the draft proposal submitted in November 2024, Australia Post intends to increase the prices for reserved ordinary letters delivered to the regular timetable from:
| Letter type | Current price | Proposed price |
|---|---|---|
| Ordinary small letter (BPR) | $1.50 | $1.70 |
| Ordinary large letter up to 125g | $3.00 | $3.40 |
| Ordinary large letter over 125g and under 250g | $4.50 | $5.10 |
Australia Post is not proposing to increase the price of concession stamps ($3 for five) or stamps for seasonal greeting cards (65 cents).
After assessing the draft price notification in line with its role, the ACCC has found that Australia Post is unlikely to recover revenue in excess of its costs for its reserved postal services.
"Our preliminary assessment found that Australia Post's proposed price increase is unlikely to produce surplus revenue for the reserved letter service over the coming years," ACCC Commissioner Dr Philip Williams said.
Australia Post's letter services - including its reserved services - have incurred significant losses in recent years, which Australia Post attributes primarily to the ongoing reduction in letter volumes combined with an increase in delivery points.
Currently, Australia Post only delivers around two letters to each household per week and expects reserved letter volumes to continue to decrease by around 10.6 per cent annually until 2027-28. At the same time, the number of delivery addresses serviced by Australia Post continues to grow, which adds to the financial pressure on the letter service.
"The ubiquity of digital communication options has impacted the commercial viability of letter delivery globally," Dr Williams said.
"At the same time, Australia Post remains an essential national service - especially for vulnerable members of the community and those in regional and remote parts of the country."
For the average Australian household, which sends around six letters per year, the proposed basic postage increase to $1.70 would result in an additional annual cost of approximately $1.20. However, the ACCC recognises that the proposed price rise would be the third such increase within four financial years, from a basic postage rate of $1.10 at the start of 2022-23.
In forming its preliminary view, the ACCC carefully considered the feedback presented by stakeholders during a consultation process in late-2024. While the ACCC acknowledges public opposition to the proposed increase, it has applied a cost-based approach in its analysis within the confines of its regulatory role.
"Our assessment seeks to balance the needs of consumers who rely on mail with the financial sustainability of the letter service, and we're very conscious that further stamp price increases may present affordability challenges for some consumers and small businesses," Mr Williams said.
Following feedback from mail users, the ACCC recommends Australia Post increase the annual cap on the number of concessional stamps available to eligible concession card holders as a way to lessen the impacts of the proposed price rise for these customers.
The ACCC also acknowledges that the proposed price increases may have a disproportionate impact on businesses and organisations sending large volumes of mail as part of their operations - particularly those which are subject to legal obligations to send correspondence by post.
"For those businesses which are heavily reliant on the postal service or are unable to change to electronic alternatives, we consider Australia Post should explore ways to make letter sending more affordable in addition to the existing bulk rates on offer," Dr Williams said.
In March 2024, the ACCC made several recommendations to Australia Post regarding changes to its financial modelling and forecasting as well as improvements to its cost allocation model ahead of future price notification processes. Australia Post has addressed a number of the ACCC's recommendations, including the commissioning of an expenditure review by Frontier Economics into the efficiency of Australia Post's costs.
"While Australia Post has made progress on the recommendations, further work is needed to support any future ACCC pricing assessments," Dr Williams said.
"We also consider that Australia Post needs to be more transparent with the public about its implementation of such recommendations."
The ACCC invites submissions in response to its preliminary view paper by 5pm Monday 12 May 2025. Submissions received will be considered by the ACCC in making its final decision.
The ACCC will issue a final decision after receiving a formal price notification from Australia Post.
Australia Post must also notify the Minister for Communications of the proposed price increase and must not increase prices if the Minister rejects the proposal within 30 days.
Background
Australia Post's proposed price change was outlined in a draft price notification provided to the ACCC in November 2024.
Under the Competition and Consumer Act, the ACCC is responsible for assessing proposed price increases by Australia Post for its reserved ordinary letter services delivered to the regular timetable. The ACCC must consider Australia Post's proposed price increases 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.
The ACCC does not have the role of approving any proposed price increase under the Australia Post price notification framework. Only the Minister for Communications has the power to reject a price increase proposed by Australia Post.
Australia Post's reserved ordinary letter services are services that Australia Post has a statutory monopoly over and are declared as 'notified services' for the purposes of Part VIIA of the Competition and Consumer Act. The current declaration for Australia Post's notified services is due to expire on 30 September 2025 unless extended.
