Cabinet approves Australia Post doom loop

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Cabinet has approved the Turnbull plan for an Australia Post doom loop:

The reforms will allow Australia Post to introduce a “regular” and “priority” letters service. Letters send with a “regular” stamp will arrive an average of two days later than they do currently, with mail within metropolitan areas to arrive a day later than the current timetable.

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.

…Australia Post will be able to charge what it likes for a “priority” stamp, which would see a letter delivered on the current timetable. Priority stamps are expected to cost around $1.50 when they are introduced and prices could rise to $2 in later years.

That makes absolutely no sense to me given it will only accelerate the decline of mail usage via the very effective tool of relative pricing.

On the other hand, slower mail surely means less posties so job losses to follow, I expect.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.