Australia Post ditches daily letter delivery as parcels take precedence

The federal government has set new performance standards for Australia Post while guaranteeing the number of post offices across the nation will not change.

Australia Post will take longer to deliver letters under new performance standards agreed with the federal government recognising its growing role in parcels.

From Monday, letters will be delivered every second day instead of every day for 98 per cent of locations across Australia.

At the same time, Australia Post will have an extra day to deliver standard letters.

For example, a letter posted within a state should be delivered in four days and no more than five.

Between states, deliveries should take between six and eight days.

The government-owned corporation will also be able to change how it manages priority mail, allowing it to deliver services 'at a more commercial rate'.

A letter posted within a state should be delivered in four days, and no more than five days. (Dan Himbrechts/AAP PHOTOS)

After trials were set up last year, capital city households may already be familiar with the letter delivery extension.

But Communications Minister Michelle Rowland and Finance Minister Katy Gallagher reassured Australians the minimum number of post offices across the nation won't change

And posties will continue to deliver daily, although their deliveries will favour parcels.

'These changes reflect the way Australians now interact with Australia Post and will help improve the company's financial sustainability,' Ms Rowland said.

According to Australia Post, four in five households bought something online in 2023 and 9.5 million received a parcel.

But letter volumes have declined by two-thirds since peaking in 2008.

Earlier this month, the price of a stamp for a standard letter rose to $1.50, from $1.20.

The average Australian sends about 15 small letters per year and receives two a week - although that's expected fall to one a week in the next five years.

In March, Australia Post reported a 2023 second half pre-tax profit of $33.6 million, up 42 per cent on the same period in 2022.

The rise was attributed to the delivery of almost 100 million parcels across Australia.

The letters business recorded a $182.1 million loss in the six months ended December, as letter volumes fell 11.9 per cent.

Australian Post said the new delivery model will be rolled out nationally by the end of 2025, with posties delivering priority mail, express letters and parcels every day, and standard letters and unaddressed mail every second day.

'The regulations governing Australia Post had previously required us to focus on everyday letter delivery, even when there were no letters to deliver,' CEO Paul Graham said.

'This has been contributing to significant financial losses for Australia Post.

'This is an important first step for Australia Post to address those financial losses by focusing its services on the growing parcel delivery business.'