The Australian Competition and Consumer Commission today released an issues paper seeking comment from interested parties on Australia Post's proposal to increase prices across a number of its monopoly letter services, including the basic postage rate.
Australia Post provided the ACCC with a formal price notification on 1 April 2010 which proposes an increase in the basic postage rate from 55 to 60 cents as well as increases in the prices of a number of its Small, Large and PreSort letter services.
"The ACCC has received a submission from Australia Post in support of the proposed price increases," ACCC chairman Graeme Samuel said.
"This submission includes modelling of Australia Post's mail volumes, costs, and planned savings and productivity initiatives. The issues paper invites comment from interested parties on Australia Post's proposal."
In 2009, the ACCC objected to a pricing proposal by Australia Post to increase the basic postage rate from 55 to 60 cents. The ACCC at that time noted that letter volumes were forecast to decline. It considered that while some of Australia Post's costs were fixed, there was an expectation that the overall cost base would show some response to the decline in demand for letter services.
In lodging its current price notification, Australia Post has stated that the depth and duration of the decline in letter volumes has been significantly greater than it had anticipated in 2009 and that Australia Post has increased its cost reduction efforts.
Under the prices surveillance provisions of the Trade Practices Act 1974 the ACCC has a role in assessing proposed price increases for Australia Post's monopoly letter services.
To assist the ACCC's consideration of the notification, submissions are invited from interested parties on key issues. Submissions should reach the ACCC by 30 April 2010.
The price notification, issues paper and submissions received will be available on the ACCC's website, www.accc.gov.au.