Domestic Postal Rates to Change in June

NEWS RELEASE

WEDNESDAY 4 APRIL 2007

DOMESTIC POSTAL RATES TO CHANGE IN JUNE

New Zealand Post is increasing the price of the standard domestic letter by 5 cents to 50 cents from 1 June 2007.

The increase is the first since April 2004, when the price moved from 40 cents to 45 cents.

Peter Fenton, New Zealand Post’s Postal Services Chief Executive Officer, said that growth in the number of addresses to which New Zealand Post delivers and significantly increased costs had made it necessary to increase the domestic letter rate.

“Even at 50 cents it costs less to send a standard letter in New Zealand than it does in Australia, Britain, Canada and the majority of the other OECD countries,” Mr Fenton said.

By comparison, Australia’s standard postage rate is the equivalent of 56 cents in New Zealand currency. In New Zealand currency, the UK charges 65 cents; Canada 66 cents; Ireland 89 cents; Germany $1.02; and at the high end of the scale, Norway’s standard postage rate is $1.49 (all currency conversion rates as at 30 March 2007).

The changes announced today include FastPost, which will increase from 90 cents to $1.00. Parcels, bulk mail and international mail prices are not affected.

“Very simply, the costs of mail delivery cannot be sustained at the current price,” Mr Fenton said.

“Due to the growth in the number of addresses around the country, the postal delivery service is stretching further than three years ago. New Zealand Post is delivering to 120,000 more places now than this time in 2004. And we’re delivering to 347,000 more places than 10 years ago.

“A significant part of the cost of running this postal network is fixed and New Zealand Post has also absorbed a number of business cost increases over the last three years.

“Inflation has increased by 8.3 per cent since March 2004 and labour costs have gone up by 10.8 per cent for frontline operational staff.” He said that labour costs make up around 40 per cent of the cost of mail delivery.

Mr Fenton added that there was no need for people to rush out and buy extra stamps now. “A 45 cent stamp will be accepted until 1 June,” he said. “After that, people can add a 5 cent stamp to top up. New Zealand Post has ordered sufficient numbers of 5 cent stamps for people to use from June on.”

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A full price list is attached

Price list – effective 1 June 2007

Service Current Rate New Rate
Standard Post Medium $0.45 $0.50
Standard Post Extra-large $0.90 $1.00
FastPost Medium $0.90 $1.00
FastPost Extra-large $1.35 $1.50

The changes will also affect:

* Postage Included Envelopes

* BrandPost

* FreePost

* PermitPost

* BoxLink.

Parcel, bulk mail and international mail prices are not affected.

ENDS

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