Stamp prices to jump under new Australia Post reforms

Stamp prices are set to rise to at least $1 each under new changes to Australia Post approved by the federal Cabinet.

The reforms, devised by Communications Minister Malcolm Turnbull and expected to be formally announced on Tuesday, will see the service provider adopt a two-tiered pricing system for letter deliveries, Fairfax Media reports.

The "regular" option will mean letters arrive on average two days later than the current timetable, or a day later in metropolitan areas.

Australia Post is expected to apply to the Australian Competition and Consumer Commission to increase the cost of a "regular" stamp from 70 cents to $1 when the new regulations come into effect.

Letters with a "priority" stamp will arrive on the current timetable but are expected to cost around $1.50.

Prices will stay at the current level for concession card holders, including pensioners.

The reforms won't require changes to legislation but can be disallowed by the Senate.

Australia Post last week announced a first-half profit of just $98 million, driven by losses of $151 million in its letters business.

A recent report commissioned by the government forecast Australia Post's letters business would lose $12 billion over the next decade.

Australia Post management hopes the reforms announced by the government will cut these losses in half to $6 billion.

Source: Fairfax Media