Letters slower, more expensive: Turnbull

Communications Minister Malcolm Turnbull admits letters will take longer to arrive and be more expensive under changes to Australia Post.

But the alternative was either massive subsidies of $7 billion of taxpayers' funds over the next decade or abandoning the letters business altogether, he said.

Mr Turnbull said the government had been quite up front about the problems facing Australia Post.

Australians were sending a billion fewer letters than they were in 2008 with the letters business heading more and more into the red.

Under the proposed reforms, regular letters will take an extra two days to arrive while priority mail will arrive faster. That starts in September.

Australia Post is also asking the competition watchdog if it can raise basic stamp prices from 70c to $1.

Mr Turnbull said businesses and governments were the main users of the letter post and the only reason they were still sending letters was inertia.

"They haven't updated their billing systems and they haven't addressed their own internal mechanics. But the trend is inextricable," he told ABC TV.