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Australia Post Holds Firm on Price Increase

30 Jun 2009

Last weeks meeting between Australia Post and executives of industry bodies together with representatives of leading publishing houses appears to have had negative results.


As reported on MediaBizNet on the 25th June 2009, negotiations were set in stream requesting Australia Post defer the increase due for 6th July 2009. A request to meet with Australia Post MD, Graeme Johns appears to have fallen on deaf ears as indicated in yesterdays announcement from Publishers Australia under the heading 'Bloated Oz Post Refuses to Trim Down' states:-


"Hundreds of publishing sector jobs threatened by print post price hike. In the most challenging economic environment any of us have ever faced, it seems that Australia Post is intent on protecting its bloated and inefficient internal structure, while the rest of us are being forced to tighten our belts and seek improved efficiencies in our business operations.


How are Australia's magazine publishers expected to tighten belts when the Government (via Australia Post) insists on imposing their regular annual increase on the print post sector, despite this most difficult of economic climates?


Publishing industry leaders including Magazine Publishers Association chairman, Nick Chan (Pacific Magazines) and Publishers Australia chairman, Geoff Hird (Westwick-Farrow Publishing) met last week with senior management of Australia Post to request a deferment of this year's price rise, citing the economy and a battered magazine publishing environment that has some companies already on the
verge of perishing.


"They were not interested to entertain our requests, stating the ‘decision has been made', and adding that Australia Post had cost increases they needed to offset" Hird stated, adding "It's incredible, given the unique economic environment we find ourselves in, that Australia Post cannot deal with external pressure like the rest of us have to."


One of the reasons given for pushing on with the price hike was a 10.4% increase in Post's transport and staff costs. The Australian Bureau of Statistics March quarter figures actually show a 4.6% decrease in transport costs over the past 12 months - underlining the inefficiency of this Government enterprise's internal operations.


The 3.5% to 4.5% real increases that the price hike will affect on magazine publishers will result in hundreds of job losses across the publishing and printing sectors - with MPA and PA members certain to reduce print and post runs.


"Our members cannot absorb, nor pass on to subscribers or advertisers, these cost increases at this time, and the harsh reality is that many will be forced to cut staff - as will our print industry partners, in line with dropping print run volumes" Hird said.


Printing Industries Association of Australia chief executive, Philip Andersen also weighed in to the debate, stating "It's a difficult time for the printing industry, and we had hoped that a government instrument could have done more to moderate the level of increase on this occasion. We've argued that they haven't reduced their own internal costs sufficiently, and we think they should explore that further."


Given that a majority of magazine publishers are providing valuable information that helps to stimulate business and consumer spending it seems incongruous that ‘one of the Government's own' is working against this important business sector.


The key issue at point here is how a bloated and inefficient Government organisation can even consider external price hikes, as opposed to internal restructure, in these tough times for business and industry. And exactly how many lost jobs in the publishing and printing sector will it take before the Government grabs the belt and finally wraps it tight and firm around Australia Post?


The RBA announced recently they expect the CPI to be just 1.5%.


An urgent request from Publishers Australia at last week's meeting with Australia Post executives for a meeting with Managing Director, Graeme Johns, has thus far met with no response. Australia Post's print post increases are set to kick in on July 6th."


Mailing house, GEON AP Mail have written to all clients advising the percentage increase impacting on various mailing services. They point out that unless a current contract agreement is with Australia Post for individual publishing houses the increase will be:-


  • Parcel Post - Average increase of 3.9%
  • Express Post - Average increase of 3.6%
  • International Letters - Average increase of 3.2%
  • International Parcels - Average increaseof 3.0%
  • Registered Post - Average increase of 4.5%
  • Print Post -Average increase of 3.6%
  • Unaddressed Mail - Average increase of 4.0%



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