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2014-11-25

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Stamp price increase?

“The price of stamps could hit as much as $1 a letter under plans to arrest the losses on letters. Ahmed Fahour has asked Communications Minister Malcolm Turnbull to present a rescue package to Cabinet before Christmas, including a two-tiered system for mail and flexible pricing for delivery services.” (Extract from AFR.)

Mr Fahour says letter volumes are falling off a “cliff”. But Australia Post’s annual report shows an overall $116.2 million profit. Revenue increased to $6.4 billion, up 8.3% on last year. Addressed mail volumes dropped 4% last year, not 12% as spruiked by Mr Fahour. Indeed Post still delivered over a billion letters.

While the CWU supports a modest increase in price of stamps, the fact is that Post is undertaking staff cuts, modernising equipment, delivering parcels through its mail network and other costs saving measures.

Under the plan, which would require government approval, Post would introduce a two-tiered pricing system, similar to the UK’s second class mail service, for non-urgent letter deliveries. Customers wanting speedier letter delivery would pay more than the standard rate.

Self-fulfilling prophecy

Australia Post has already introduced a two-speed, user-pays system for business letters, after the government dropped ACCC oversight of its business division.

Printing Industries Association chief Bill Healey said that Mr Fahour seemed to be fast-tracking the demise of its core business, mail.

“The frequency and intensity with which he denounces the future of post is concerning,” he said. “It becomes a self-fulfilling prophecy where he can put the price up and say, ‘you see, I told you the mail was dead’,” Mr Healey said.

Source: The Australian Financial Review (AFR)

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