Australia Post has been given the thumbs up by the consumer watchdog to raise the price of a basic stamp by more than 40 per cent, even as it takes longer to deliver letters.
The Australian Competition and Consumer Commission said on Friday it does not expect to object to Australia Post's proposal to raise the cost of a basic stamp from 70 cents to $1 and allow two extra business days for delivery.
Australia Post wants to implement the change from January to help offset the huge losses it incurs on the service due to dwindling demand.
The national postal service notched up its first loss in more than 30 years in 2014/15, losing $222 million due to a $381 million loss in the company's mail business.
Letter volumes have slumped 36 per cent since 2008 as Australians switch to digital alternatives, and the ACCC says Australia Post will not recover its losses even with the price hike as demand tumbles further.
"It's important that Australia Post continues its focus on achieving cost reductions and operational efficiencies," ACCC commissioner Cristina Cifuentes said.
"We will look closely at Australia Post's progress in this area in considering any future proposal for price increases."
The federal government in March approved the introduction of a two-speed letter service by Australia Post, with its regular post set to be two days slower than a more costly priority service.
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