The Australian Competition and Consumer Commission (ACCC) has approved the proposal of Australia Post to charge basic stamp from 55 to 60 cents citing the need for the government-owned company to raise more revenues amidst declining usage of the traditional snail mail.

Australia Post has been instituting cost-cutting measures but to no avail and still suffers from financial woes due to sliding sales and the price upgrades should be big boost for the company which would take effect starting June 28 and would cover small, large and pre-sort letter services.

The Australia Post currently monopolises the country's mail collection, mail distribution and the issuance of postage stamps and any proposed cost increase from such services would have to be reviewed and approved by the competition watchdog, which maintains statutory power over the publicly-owned company.

In granting the proposed stamp price hike, the ACCC gave reminder to Australia Post that no further increases can be expected nor would be allowed for the next two years.

ACCC chairman Graeme Samuel noted that they initially objected to a proposed hike in 2009 since they believed then that "Australia Post's costs were not falling in response to declining volumes."

He gave assurance though that the public would not see any more increases for the next two years as "based on the current forecasts of letter volumes and costs, the ACCC considers no changes to the basic postal rate should be required beyond those proposed for June 2010."

ACCC is not discounting the possibility that further reforms may be required by Australia Post with the spectre of declining mail volumes further threatening its existence while maintaining its commitment of meeting community service obligations and remaining financially stable at the same time.