Australia Post seeks to raise base prices of postage stamps to AU$1

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An employee arranges Australian postage stamps with the picture of Australian swimmer Stephanie Rice, holding her Olympic gold medal, in central Sydney August 12, 2008. Australia Post will produce a 50 cent stamp for each Australian gold-medal-winning athlete and team, featuring an image of the gold medallist on the medal podium. Reuters/Daniel Munoz

People might soon have to pay AU$1 for a postage stamp and up to AU$3 for heavier letters as the Australia Post seeks to make changes to its letters service in a bid to survive the Internet age. It has lodged a draft notification with the Australian Competition and Consumer Commission, soliciting permission for a 30 percent increase in the pricing as well as a longer delivery time.

In its submission that has been released on Friday, the company has also sought permission from the ACCC to allow it to charge extra for letter weighing more than 125g and up to 250g. The updated pricing, if approved, would equate to a 42.86 percent hike, but the Australia Post affirmed that the prices of the concession stamps or of Christmas cards would remain the same.

It has argued that the reason it is seeking to raise the prices of its postal services is due to the steep decline in the volume of letters being sent through it since 2008. "The advance of digital communications technology and mobile devices have led to the rapid substitution of letters as a form of communication," it told the commission.

Treasurer Joe Hockey admitted that the price hike would help the company survive but dismissed chances of it being privatised. "Increasingly people are communicating by phone, text message, by email," he told reporters in Tasmania on Friday.

Opposition Leader Bill Shorten also feels that the decision to raise the prices was a necessary move. However, he told reporters in Perth that it is also important to make sure that the price hike doesn’t withhold the pensioners from being able to use the mailing services to their needs.

The federal government in March approved Australia Post’s plea to launch two-speed letter delivery service. However, the regular letter delivery service would be two days slower from Jan. 4, 2016 onwards with another priority service. The company expects to implement its new pricing system at the same time.

ACCC will now assess the request by taking into account the level of increase and how efficiently the company can manage its costs. It will also evaluate whether the forecast by the company regarding the fall in the volume of mail is justifiable. The market watchdog is seeking submissions from the members of the public and stakeholders of the company. A preliminary view is expected to be released in November and the final decision in December.

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