The Australian Competition and Consumer Commission today issued its preliminary view on Australia Post's February 2008 draft price notification.
Australia Post proposes to increase the basic postal rate for a standard letter from 50c to 55c. It also proposes to increase the prices of other reserved services (i.e. those services over which Australia Post has a statutory monopoly) including large letters and pre-sorted mail. The last time prices for reserved postal services were increased was in 2003.
"The ACCC has taken a forward-looking approach in its assessment of Australia Post current pricing proposal," ACCC Chairman, Mr Graeme Samuel said. "Based on this analysis, the ACCC's preliminary view is to not object to the price increases."
"However, the ACCC requires that any future price notifications be supported by a robust, forward-looking proposal, that provides certainty to users of Australia Post's services about prices for a reasonable period of time, which the ACCC suggests should be at least three years.
"The ACCC has serious concerns about Australia Post's one-year pricing proposal, given its suggestion of a move towards more frequent price adjustments," Mr Samuel said.
"In the absence of information on how prices for Australia Post's monopoly letter services will change over a longer time period, such a move will reduce Australia Post's incentives to maintain cost efficiency over time and create uncertainty for Australia Post's customers."
The preliminary view will be available from the ACCC's website. The ACCC is currently seeking submissions from interested parties on the ACCC's preliminary view. Submissions should be provided to the ACCC by 4 July 2008.