The cost of postage is set to increase by five cents in an effort to reduce the post office's $1.2 million deficit.

The Senate approved the 12 percent postage increase in an amendment to the Post Office regulations yesterday, the first increase in four years.

PLP Senator, Patrice Parris said the Post Office operates at a deficit because of competition from courier firms as well as the expansion of the internet, but hoped increased rates would address the deficit.

Opposition leader in the Senate, Maxwell Burgess said a 12 percent increase over the period since the last increase was "reasonable'' as it worked out to be three percent a year.

He also highlighted the challenge facing the Post Office relating to the information age and technology and expressed concern over the challenge it faces going forward.

Independent Senator Walwyn Hughes raised concerns over the future of the Post Offices pointing out that ten years ago it had a $200,000 deficit, whereas today, it stands at $1.2 million despite two separate stamp rate hikes within that period.

He also called on Government to do more with "e-Government'' and use the Post Office as a base for electronic services to make it more functional in this day and age.

Mr. Hughes questioned if the rate increase would reduce the $1.2 million deficit and how high the deficit would be without this rate increase.

Local letters will now cost 35 cents to send and foreign mail will cost 50 cents for letters not exceeding 20 grams.

Post cards and unsealed greeting cards will increase to 30 cents for local and 45 cents for foreign.

Nearly all other rates will increase by about 12 percent.

It will cost $2 more to send packets of books to a foreign country, and an extra dollar to send a parcel not exceeding 500 grams to the US, but only an extra 20 cents for a similar parcel to the UK.

In the International Data Express (IDE) category, which allows preferential delivery of a postal packet of a maximum weight of 15 kilograms, it will cost $3 more for a half kilogram package to the US, Caribbean and South America, and an extra $2 for a similar package to the UK and Europe. The minimal cost to send letters and postcards via airmail will be 70 cents.

Patrice Parris