To offset ‘significant ongoing losses’ in its letters business, Australia Post has proposed raising the cost of a stamp from A$1.50 (US$0.97) to A$1.70 (US$1.10) from July 1, 2025.
The draft notification of the basic postage rate (BPR) increase, which has been lodged with the Australian Competition and Consumer Commission (ACCC) for consideration, does not include concession and seasonal greeting stamps, which have not increased in price since they were launched more than 10 years ago.
According to Australia Post, less than 3% of letters are sent by individuals, with the vast majority mailed by businesses and government agencies. The post’s letters business remains in structural decline, with volumes dropping a further 12.9% in FY24, resulting in a A$361.8m (US$234.5m) loss. Lettermail is now at a level not seen since the 1950s and total letter volumes are expected to reduce further as digitalization increases.
Paul Graham, group chief executive officer and managing director of Australia Post, explained, “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.”
To provide further transparency and to inform future planning for customers, Australia Post has also indicated a possible pricing path for FY27 and FY28 postage rates to offset forecast losses in its letters business. This price path shows indicative increases to the BPR of A$0.15 (US$0.09) in FY27 and the same amount in FY28, with both subject to change and consultation.
Commenting on the proposed price increase, Bob Chizzoniti, director of the Post Office Agents Association Limited (POAAL), said, “While stamp sales have been in gradual decline at post offices over recent years, letters are still the core of the postal business. We will scrutinize Australia Post’s draft price notification and give our feedback to the ACCC.
“POAAL members, who own and operate licensed post offices and who hold mail contracts, want to operate profitable businesses as part of the Australia Post network. The ongoing financial success of Australia Post overall is important to our members.”