Australia Post could be given the OK to end the everyday delivery of standard mail and introduce a two-tiered pricing system as early as year's end, under reforms being considered by Communications Minister Malcolm Turnbull.
Mr Turnbull is expected to present a rescue package for Australia Post, including three-day-a-week delivery for standard mail, to federal cabinet within months.
Mr Turnbull is also actively considering allowing the company to introduce a two-tiered pricing system, similar to Britain's second-class mail service, for non-urgent letter deliveries. Customers wanting speedier letter delivery would pay more than the standard rate.
Safeguards for disadvantaged Australians, including pensioners, would be included in the reform package.
Representatives from Mr Turnbull's office have told stakeholders the Minister aims to take reforms to cabinet within two months and to change Australia Post's community service obligations within six months. The final shape of the package will be influenced by Australia Post's corporate plan, to be handed to government next month.
Australia Post, which last week announced 900 job losses, is lobbying the government to remove rules requiring the company to offer a uniform rate for standard letter deliveries and to deliver mail five days a week to 98 per cent of the population. It is pushing for regulatory change by the end of the year on the grounds that plummeting letter revenues make the situation an urgent one.
Australia Post believes the reforms will allow its regulated mail business, which lost $218 million last year, to approach a break-even point over the long term.
The push will gather pace next week when the government tables the executive summary of a Boston Consulting Group report into Australia Post's financial state. It is understood the review will validate Australia Post's projections of rapidly accelerating letter losses and will back the introduction of three-day-a-week letter deliveries and two-tiered pricing.
Australia Post managing director Ahmed Fahour briefed politicians from all sides on the need for reform during a visit to Parliament House on Tuesday. Mr Fahour announced a package to help struggling rural and regional licensed post offices by contributing an extra $40 million a year in annual payments and introducing credit card and eftpos services to 430 licensed post offices.
''While letter volumes decline, we are committed to not only keeping our post offices open and vital to the communities they serve but also growing their relevance by evolving them from a reliance on letters through increasing the trusted products and services they offer,'' Mr Fahour said.
Nationals Senator John Williams, chair of the Senate Communications committee, said he was a supporter of three-day-a-week postal delivery.
''If people aren't sending much mail, why do you need it every day?'' he said. ''If you lose your local post office you lose the heart of your community, so it's important to keep them viable.''
A spokesman for Mr Turnbull declined to comment.