Going up: Cost of PO Boxes to rise 7% across the country

THE cost of post office boxes and locked bags will go up an average of 7% across the country in two weeks, as Australia Post seeks to bolster its ailing bottom line.

A price increase on all sized post office boxes, including the corporations "reduced rate" boxes, will be active from February 1.

A spokeswoman for Australia Post said the government entity remained committed to providing services "at competitive prices", but said the company was operating in a "challenging economic environment with increasing costs".

The cost of a medium post office box will rise from $151 to $163; a small box from $104 to $112 and a large box from $242 to $260 a year.

While the cost of boxes will rise for all customers, those who pay on time (before March 1), will get a small discount of about 3% from the rises, but will still face a 4% compared with last year's price.

The company, which will be assessed under the Abbott Government's Commission of Audit, has been struggling with falling letter volumes and rising costs for several years.

And the price rises for post office boxes are likely to be the first of several this year; with the company also considering increasing the cost of stamps among other changes to services.

A submission from the company to a Senate inquiry revealed earlier this month the corporation will be unable to deliver a return to government in just two years, despite its mandate to remain profitable.

While the government has said it is not considering privatising the business, the audit will seek to find new options to ensure its financial sustainability, including a potential sell-off.

The postal service has also been in talks with the government over a potential takeover of Centrelink services at regional post offices, despite the government saying such a move was not being considered.

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