Australia Post has received regulatory approval from the Australian Competition and Consumer Commission (ACCC) to raise domestic letters postage rates, marking a significant shift in its postal pricing strategy amidst a sharp decline in traditional letter volumes.
Beginning 17 July 2025, the Basic Postage Rate (BPR) for an ordinary small letter will jump from A$1.50 to A$1.70, reflecting a real-terms increase of approximately 13% . Meanwhile, prices for larger standard letters will also increase: items up to 125 grams will now cost A$3.40 (up from A$3.00), and those weighing between 125g and 250g will rise to A$5.10 (from A$4.50) .
Australia Post’s proposal, formally submitted on 3 June 2025, followed an earlier draft notification sent to the ACCC in November 2024 . The price increase is the result of a formal price notification process governed by the Competition and Consumer Act (2010), which empowers the ACCC to evaluate, but not approve, changes to Australia Post’s reserved ordinary letter services .
This decision emerges against the backdrop of a steep decline in letter usage across Australia Post’s network. Letter volumes have fallen to levels not seen since the 1950s, with households now receiving an average of only two letters per week, while sending roughly six letters per year. The downturn has taken a heavy toll on finances, contributing to an A$83.7 million loss in the first half of 2025 for letter services alone . These sustained losses threaten the financial sustainability of the reserved letter service.
In its assessment, the ACCC concluded the proposed price adjustments would enable Australia Post to better match its revenue with operating costs without yielding undue profit. Commissioner Dr Philip Williams noted the rise is “unlikely to produce surplus revenue” over coming years . He also expressed concern about affordability impacts, particularly for vulnerable Australians, and recommended increasing the annual cap on concession stamps (currently capped at 50 per year) to improve access .
Large-volume letter senders—especially businesses and government bodies under postal obligations—could bear the brunt of the increased costs. In response, the ACCC urged Australia Post to enhance transparency and dialogue with such customers and explore cost-saving measures .
Despite the regulatory nod, the proposed increases still face one final hurdle: Communications Minister Anika Wellshas 30 days to veto the changes. A government spokesperson indicated the decision remains under active review.
Australia Post CEO Paul Graham defended the proposal, pointing to the structural challenges facing traditional mail—rising delivery points and ongoing digitisation—and said the increases are necessary to prevent further financial deterioration . He acknowledged the social utility of the service, especially for rural, remote, and vulnerable Australians, and highlighted the exemption of concession (60 cents for five-stamp books) and seasonal greeting stamps (65 cents each) from the price rise .
If enacted, this pricing shift will mark the third major increase in the past four years—the first since the BPR rose from A$1.10 to A$1.50 between 2020 and 2024 . Nevertheless, Australia Post maintains its rates will remain below the OECD average of A$1.93 for small domestic letters—even after the hike .
The overarching goal, ACCC commissioner Anna Brakey emphasized, is to preserve an equitable and accessible national letter service, particularly for those who depend on it most, while ensuring its economic viability .
