Fed: Australia Post moves to raise stamps price to 50 cents

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Fed: Australia Post moves to raise stamps price to 50 cents

By Barbara Adam and Charisse Ede

MELBOURNE, April 26 AAP - Australia Post wants to increase the cost of a basic postagestamp to 50 cents in a bid to ensure the viability of its letters business.

The company has sought approval for the increase from January 2003 next year from theAustralian Competition and Consumer Commission (ACCC), which must give the price changethe nod.

The five cent increase, the first in 10 years, would boost Australia Post's revenueby $90 million a year.

Australia Post today denied the increased use of email had influenced the decision,saying it was necessary to remain commercially successful.

But the federal opposition said any increase was hard to justify by an organisationthat posted a record net profit of $274.5 million last financial year.

Opposition communications spokesman Lindsay Tanner blamed the proposed increase onthe "special dividend" of $109.8 million paid by Australia Post to the federal governmentlast year.

However, Australia Post said even at 50 cents, the postage rate would still be oneof the lowest in the developed world.

National spokesman Gary Highland said the price increase would not affect parcels orinternational mail.

But there would be an increase of between two and five cents on ordinary large letters,depending on size and weight, and pre-sorted business mail would increase by an averageof 2.2 cents per item, he said.

Mr Highland said the price increases would generate an additional $90 million a year,would be invested back into the company's letters business.

He said each time a 45 cent letter was posted, it cost Australia Post an additional11 cents to deliver it.

Even under the price increase, it would still cost Australia Post an additional sixcents per letter, he said.

"We think it's a very reasonable increase," he said.

"It's all to do with the fact that the Consumer Price Index has increased by 26 percent in the last decade.

"You'd be hard-pressed finding a domestic item that hasn't increased in price.

"We obviously need to be commercially successful to provide services for Australians.

Communications Minister Richard Alston said the ACCC must assess whether this increasewas justified for consumers and its impact on the business bulk mail.

He said the federal government would consider the impact of any stamp price increaseson bulk mail carriers before allowing any rise.

Australia Post expects to submit details of its proposed new pricing structure to theACCC by the end of this month.

The ACCC said it would examine the issues carefully and hold public hearings on thematter around Australia in June.

AAP ce/gfr/mg/de

KEYWORD: STAMPS NIGHTLEAD