The Australian Competition and Consumer Commission (ACCC) is currently seeking feedback on its preliminary assessment regarding Australia Post's proposed stamp price increase of 13.3%, set to take effect in mid-2025. This increase would affect the prices of reserved ordinary letters, with the cost of a small letter rising from $1.50 to $1.70, a large letter up to 125g increasing from $3.00 to $3.40, and a large letter over 125g and under 250g going from $4.50 to $5.10.

Despite the proposed price hike, Australia Post has decided not to increase the price of concession stamps or stamps for seasonal greeting cards. The ACCC's preliminary assessment indicates that the price increase is unlikely to generate surplus revenue for Australia Post's reserved letter services, which have been experiencing significant financial losses due to declining letter volumes and an increasing number of delivery points.

Currently, Australia Post delivers approximately two letters per household each week, with expectations of a 10.6% annual decrease in reserved letter volumes until 2027-28. The ACCC acknowledges the impact of digital communication on the viability of traditional letter delivery services, while also recognizing Australia Post's essential role in serving vulnerable communities and those in remote areas.

For the average Australian household, the proposed increase would result in an additional annual cost of about $1.20. However, this would mark the third price increase in four years, raising concerns about affordability for consumers and small businesses. The ACCC has considered stakeholder feedback and suggests that Australia Post should increase the annual cap on concessional stamps for eligible concession card holders to mitigate the impact of the price rise.

Furthermore, the ACCC highlights that businesses relying heavily on postal services may face disproportionate challenges due to the price increase. The commission has previously recommended improvements to Australia Post's financial modeling and cost allocation to support future pricing assessments. The ACCC invites public submissions on its preliminary view until May 12, 2025, before making a final decision on the proposed price increase.