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Australia Post price hike ‘another blow to industry’

Adam Zuchetti
Adam Zuchetti
29 August 2019 2 minute readShare
Australia post letterbox

Australia Post’s proposal to hike the cost of certain postage services by 10 per cent has attracted criticism that its justifications are “misleading” and that the rise would hit the printing and advertising industry —and its 251,000 employees — particularly hard.

In early August, Australia Post submitted its planned price rises to the ACCC for review which, if implemented, would take effect from 1 January.

At the time of the announcement, the Post Office Agents Association Limited (POAAL), which represents SMEs operating in the sector including Australia Post licensees, mail contractors and other associated businesses, said the higher prices are needed to keep the letter service “sustainable”.

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“The letters service should be self-funding, and not dependent on cross-subsidies from other parts of Australia Post’s operations, such as parcels,” its director, Bob Chizzoniti, said.

However, the printing industry took a different point of view, with The Real Media Collective arguing that such a substantive price hike would be “yet another blow” to an industry already “battling against internet tech giants and their predatory conduct”.

 

It said that the commercial viability of media companies — which use postal services to reach their subscribers — is becoming “untenable”, and that Australia Post’s proposed price increase is “yet another slap in the face”.

According to CEO Kellie Northwood, the industry currently employs some 251,000 people and that such a price increase “will be detrimental to Australian jobs”.

She also criticised Australia Post’s proposal as being “misleading”.

“To argue that letters are to blame for the reduced profitability is somewhat misleading,” she said.

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“Australia Post’s position fails to address the monopolistic model that its letters business operates, which provides a solid infrastructural advantage to their parcel and e-commerce businesses.

“The reporting of the letters business does not take into consideration the latent capacity from this provides opportunity for parcel delivery via the postal network, a strong competitive advantage from other parcel distributors.”

Ms Northwood also suggested that “deep diving” into the national postal carrier’s pricing proposal shows “there has been investment into electric delivery vehicles and e-commerce solutions impacting these results”.

She said that claims the letter business was the sole drag on Australia Post’s profitability “does not consider all elements of the business”.

“There is absolute recognition that a government asset should deliver a profit for the greater economy; however, a balance must be achieved,” Ms Northwood said.

“Balancing performance of a government asset against the government’s broader fiduciary obligations to the people of Australia, and the negative impact on business and the flow-on effect to individuals and the Australian economy, is simply too big to ignore.”

According to its website, The Real Media Collective was formed in 2018 following the merger of three separate industry associations, and represents “the users, producers and distributors of catalogues, direct mail, print, paper and more across the entire marketing channel”.

The ACCC has released an issues paper on Australia Post’s pricing proposal. Anyone wishing to comment on it can do so to the ACCC by Friday, 13 September.

Australia Post price hike ‘another blow to industry’
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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