The Australian Competition and Consumer Commission (ACCC) has given the nod to Australia Post's proposed price increase for its reserved ordinary letter service.

The proposed 25 per cent increase, set to take effect in April, would see the price for reserved ordinary letters delivered to the regular timetable rise from $1.20 to $1.50 for ordinary small letters.

Australia Post also plans to increase the prices for ordinary large letters up to 125 grams from $2.40 to $3.00, and ordinary large letters between 125 and 250 grams from $3.60 to $4.50. However, there will be no price increases for concession stamps, which will remain at 60 cents each or 5 for $3 for eligible concession card holders. The price of seasonal greeting cards will also remain the same at 65 cents.

ACCC Commissioner Anna Brakey said: “After assessing the proposal in line with our regulatory role, we don’t object to Australia Post’s proposed price increases on a cost-recovery basis.”

The ACCC has identified some concerns and made several recommendations to improve Australia Post’s financial modelling, particularly if further price increases are proposed in the future.

“Our recommendations seek to improve how Australia Post incurs and accounts for the costs of its reserved letter services, so consumers are not paying more for stamps than they should,” said Brakey. “We acknowledge the concerns raised in our consultation processes about the impact of the price increase on consumers and businesses, especially in light of cost-of-living pressures.”

The average Australian sends approximately 15 small letters a year, so the price increase would mean an additional cost of $4.50 per year.

Australia Post’s proposed price change was outlined in a draft price notification provided to the ACCC in August 2023, later revised in November 2023 and corrected in December 2023.

The price notification assessment was conducted concurrently with the Australian Government’s modernisation review into postal services.