Big changes loom for Australia Post as the financial losses from its declining letters business continue to mount.
The ABC is reporting that cabinet communications minister Malcolm Turnbull is set to announce a two-speed mail service at Australia Post in the wake of his concerns about “onerous regulated performance standards”.
His changes are likely to include a premium charge for next-day delivery of mail, as well as a rise in the cost of posting a letter from 70 cents to $1, the ABC says. Regular mail will take 2-3 days to deliver.
Any increase in postage costs will require the approval of the Australian Competition and Consumer Commission.
Last week Turnbull posted a blog titled “Reforming Australia Post” in which he said:
The government is working closely with Australia Post to develop an important reform package, to not only ensure that the letters business of Australia Post can cover its costs, but to also provide additional financial support to licensed post offices as well as ensuring that concession card holders continue to have access to stamps at discounted prices.
The minister points out that people now send a billion fewer letters annually than its 2008 peak and the decline is expected to rise to 11% annually.
“The decline of Australia Post’s letters business threatens the financial viability of its entire business,” Turnbull said.
Last week, Australia Post announced a drop in profit of 56% to $98 million for the first half, warning that its first full-year loss in more than 30 years is likely with the losses from the letters division now at $151 million.
CEO Ahmed Fahour used the results to call for urgent regulatory reform of Australia Post’s letters service.
The ABC says that under the Turnbull plan, 60-cent stamps will remain in place for pensioners and concession card holders, and Christmas cards will remain at 65 cents.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.