PIAA suspects Aus Post bulk mail stink

The PIAA is crying foul after the ACCC’s approval of the latest Australia Post price hike – it fears a rise in ordinary postage rates could lead to similar increases in bulk mail services and a blow to Australian printers.

With the ACCC’s green light the basic postage rate, for ordinary letters, will go up from 60 to 70 cents on March 31.

Bill Healey, CEO of the PIAA, smells a rat; he says Australia Post is signalling its intention to raise bulk mail rates by up to seven per cent in April – a decision it does not need to run by the ACCC, though it has the potential to hit printers already smarting from rising paper rates in March.

Healey says surveillance by the ACCC on the price of bulk mail was cut in 2011 – meaning Australia Post could indeed raise bulk rates without the watchdog’s permission.

A review of the same year suggested the rate for ordinary letters should set a ceiling price, so the 10 cent rise, according to Healey, gives Aus Post space to increase bulk mail rates as well.

He says, “Bulk mail has always been a lucrative area for Australia Post because all of the preparation and pre-sorting work it has to do for ordinary mail items is carried out by bulk mail handling operators employing modern and efficient processes at no cost to Aus Post.

“In return for these efficiencies bulk mail was charged at rates lower than ordinary mail.

“The removal of ACCC surveillance has allowed Australia Post to increase prices without taking into account the value of the bulk mail sector efficiencies it benefits from. As a result the margin between the basic letter fee and other reserved services such as bulk mail has been significantly eroded. The ACCC decision may enable Australia Post to use the 70 cents revised basic mail rate as a new ceiling for price setting.”

Australia Post lodged its 60 to 70 cent rise intentions with the ACCC on January 30; the consumer watchdog gave the green light three weeks later – the PIAA believes this is not enough time to collect feedback from stakeholders who more keenly appreciate the value of print.

The association says it will push for restoration of the ACCC scrutiny of bulk mail pricing, and continue to advocate for Australia’s postal service to be opened up to competition.

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