The Opposition has unleashed on the Albanese government over its handling of the credit card surcharge ban, accusing Labor of failing to consult small businesses.
Nationals leader Matt Canavan claims the government of fails to understand how businesses operate, warning the ban would force small businesses to increase prices to cover costs that could no longer be passed directly on to customers.
WATCH THE VIDEO ABOVE: Government under fire over credit card surcharge ban
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Small businesses were informed on September 30 that the ATO would stop accepting credit card payments from December 1, sparking widespread backlash over the short transition period.
Now, Assistant Treasurer Daniel Mulino conceded the government knew in July the Australian Taxation Office (ATO) was considering scrapping credit card payments, months before the decision was announced publicly in late September.
The government later intervened following the backlash, agreeing to cover the costs and allow credit card payments to continue until mid-2027.
‘I don’t know what planet this Labor government is on’
On Sunrise on Monday, Social Services Minister Tanya Plibersek defended the government’s approach, saying the changes were intended to save money for businesses and consumers.
“We’re talking about close to a billion dollars of savings for businesses,” she said.
Plibersek said the government had extended the transition period after listening to concerns from business owners.
“When they raised this issue of the credit card surcharge and said, ‘ We want more time to adapt; we’ve given more time because we listened,” she said.
But Canavan rejected the government’s claims, arguing businesses would ultimately pass the costs on through higher prices.
“I don’t know what planet this Labor government is on,” he said.
“I mean, you just repeated the absolute lies that somehow this is going to save consumers money.”
“There’s no savings here. The surcharges still get charged. They just can’t be passed on to consumers directly.”
Canavan said he had spoken to cafe owners who were concerned about the changes and would have little choice but to increase prices.
Government accused of failing small businesses
Canavan accused the government of failing to adequately address the underlying fees charged by banks.
“If you want to get rid of the surcharges, we’ve got to deal with the banks,” Canavan said.
“There needs to be much more competition in our financial system.”
Canavan said the government’s response, including extending the transition period by nine months, demonstrated a failure to understand the pressures facing small businesses.
“Not talking to small business, now only giving them a nine-month extension is exactly why this economy is going to fall,” he said.
“Because Tanya clearly does not understand how business works.”
Plibersek defended the policy, arguing businesses would benefit from lower surcharges when making purchases on credit cards.
“There’s a $1.9 billion saving to consumers and almost a billion dollar saving to businesses,” she said.
The government is facing mounting pressure to deliver a permanent solution, with small businesses already raising prices to help absorb the costs of the changes.
