The Australian Competition and Consumer Commission (ACCC) has announced that it will not object to Australia Post's proposed price increase of 13.3% for its reserved ordinary letter service, which is scheduled to take effect in July 2025. This decision means that the price for ordinary small letters will rise from $1.50 to $1.70, while prices for ordinary large letters will also see increases, with rates for letters up to 125g going from $3.00 to $3.40, and those between 125g and 250g increasing from $4.50 to $5.10.

Despite the price hikes, the ACCC acknowledged that the price of concession stamps and stamps for seasonal greeting cards will remain unchanged. ACCC Commissioner Anna Brakey stated that the decision was based on evidence showing that the costs incurred by Australia Post in providing letter services exceed the revenue generated from these services.

Australia Post has reported significant losses in its letter services, attributing these losses to a decline in letter volumes and an increase in delivery points. The company anticipates a continued decline in reserved letter volumes, projecting a decrease of approximately 10.6% annually until 2027-28. The ACCC's preliminary view indicated that even with the proposed price increase, Australia Post is unlikely to recover revenue that exceeds its costs for reserved postal services.

The ACCC's final decision was made following a public consultation process and emphasizes the need for Australia Post to explore ways to address affordability issues for businesses that rely on physical mail. The ACCC has also recommended increasing the number of concession stamps available to vulnerable Australians, currently capped at 50 per year.

In addition to these recommendations, the ACCC has called for improved transparency from Australia Post regarding its pricing and cost allocation models. The ACCC's role does not include the authority to set stamp prices; only the Minister for Communications can reject a proposed price increase. If the Minister does not disapprove the current price notification within 30 days, the new prices will be implemented on July 17, 2025.