Australia Post will end daily letter deliveries next year under new rules relaxing the requirement for five-day-a-week delivery.
The outcome of the postal service’s modernisation review, to be announced by the Albanese government on Wednesday, means Australians will soon be receiving ordinary letters and unaddressed mail every other business day, a response to the long-term decline of letters and the post’s first loss in eight years.
Australia Post had warned that without changes its $200m loss in 2022-23 would be the first of many. It was seeking to close some full-service post offices in metro areas and charging businesses more than households to send mail.
The chief executive and managing director, Paul Graham, described the “reform roadmap” as “a crucial first step in the modernisation of Australia Post”.
“While this reform package will provide some meaningful financial benefits over the next four years, we look forward to working with the federal government on further reforms to ensure we remain financially sustainable beyond 2026,” he said.
On Wednesday the communications minister, Michelle Rowland, and the finance minister, Katy Gallagher, will announce that after a period of consultation new delivery standards will be introduced for 98% of locations in 2024.
Under the new delivery rules posties will still pass every door on their round every business day, but half their round will receive only parcels, express and priority mail.
That half will alternate every business day, meaning parcels, express and priority mail will be delivered daily, while ordinary letters and unaddressed mail will be delivered every second business day.
The changes are based on trials co-designed by Australia Post and the Communications Workers Union.
The new rules would include allowing the post to charge a commercial rate for priority mail, which accounts for about 8% of addressed letters, within limits to be set by a statement of expectations in 2024.
Graham said the announcement “recognises we need greater flexibility to acknowledge the true cost of mail delivery”.
“Today’s reforms provide us with additional scope to adjust our pricing when needed, while maintaining the checks and balances on stamp prices that Australians want.”
In September Australia Post asked the competition watchdog for permission to raise the cost of basic postage from $1.20 to $1.50. Prices for concession card holders will remain at 60c and the price of Christmas stamps will remain unchanged at 65c.
Australia Post delivered about half a billion parcels in 2022-23 and the average Australian household now receives just over two addressed letters a week.
Rowland said “Australia Post can’t stand still”. “Consumer and small business demands are changing and Australia Post also needs to adapt,” she said.
“These new processes will mean Australia Post continues to deliver the high-quality letter service many Australians rely on, while also growing its booming parcel business for the benefit of consumers, small businesses and its hardworking staff.”
Gallagher said “in an environment where customers are sending fewer letters and more parcels, it is important that the business structure of Australia Post reflects the needs of the modern Australian consumer”.
“The fiscal sustainability of Australia Post is vital to the government’s ongoing commitment to provide high-quality postal services to Australians.”
Graham said the government had also “agreed to update the outdated methodology used to classify our network in rural and remote Australia, which was based on the 1991 census”.
That change is expected to reclassify about 70 outlets, but the government insists this will not affect services at the outlets or the minimum numbers of post offices that Australia Post must retain in regional Australia.
