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Australia Post may charge extra for mail-service

Businesses will pay extra to have their mail delivered more frequently under a “user-pays” model being considered by Australia Post.

Australia Post chairman John Stanhope said there was a worldwide trend towards fewer deliveries with letter volumes decreasing from 4.6 billion in 2007-08 to 3.6 billion in 2012-13.

Mr Stanhope signalled the “user-pays” option would be canvassed in Australia Post’s corporate plan to be delivered to government in July. The proposed system would see mail recipients paying an annual fee on top of stamp costs. Stamp costs rose from 60c to 70c in March.

“If you want it fast, you pay for it,” Mr Stanhope told reporters. “You want it more related to the cost base, so if you are happy enough for your letter to be delivered less frequently then you pay less, if you want it more frequent you pay more, if you want it express you pay more, so you pay for the level of service.”

Australia Post recorded a loss of $218 million in its regulated mail business in the 2012-13 financial year. In that year alone letter volumes were down 231 million, or 6.4 per cent on the previous year.

Speaking after a business lunch in Melbourne, Mr Stanhope said an increase in parcel deliveries due to the growth in online retailing would not offset losses in Australia Post’s letters service. He also warned the costs of mail delivery were increasing with deliveries being made to 130,000 extra addresses every year. 

Mr Stanhope said New Zealand had trialled reducing the frequency of letter delivery to three days a week and was “somewhat on the front foot” when compared to Australia.

He also said there was no reason why Australia Post should not be privatised as recommended by the government’s commission of audit, a view shared by former competition watchdog chief Graeme Samuel. Mr Samuel argues that privatisation will not result in reduced services to rural and regional areas. 

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Joe Kelly

Joe Kelly

Joe Kelly is a writer for Dynamic Business. He has previously worked in the Canberra Press Gallery and has a keen interest in business, the economy and federal policy. He also follows international relations and likes to read history.

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