Currently, fewer than three per cent of letters are sent by individuals, with the vast majority mailed by businesses and government agencies. Total letter volumes are expected to reduce further as digitisation increases.
The average household purchases five to six full-rate stamps each year and the proposed increase would equate to an annual average increase of $1.20 per household. Even with this increase, Australians will still have one of the lowest stamp prices in the OECD and Australia Post will continue to lose money delivering letters.
Australia Post’s Letters business remains in structural decline, with volumes dropping a further 12.9% in FY24, resulting in a $361.8m loss. Letter mail is now at a level not seen since the 1950s.
Group Chief Executive Officer and Managing Director Paul Graham said the rapid ongoing decline in the usage of letters by Australian households had made a BPR price increase necessary.
“Australia Post continues to face structural challenges in its Letters business that are expected to only get worse. This proposed increase will primarily impact business and government customers and is necessary to offset growing losses in our Letters business as more people choose to communicate digitally.
“We remain focused on continuing to deliver for all Australians, especially for communities in rural and regional Australia, but this is only possible if Australia Post is financially sustainable,” Mr Graham said.