The surcharge ban was sold as ‘money back every time you tap’. A month in, it has been reported that some childcare operators and private schools are tapping out on credit cards.
Anthony Albanese said a coffee should not cost extra because you paid by card, and that the price on the menu should be the price you pay. Yet cafes have done the obvious thing. They put the fee in the price.
The government’s figures, taken from the Reserve Bank, were $1.6 billion a year no longer paid in surcharges and $910 million in lower fees for business, with small business said to be the bigger winner from lower interchange. Shoppers are yet to see it at the till.
Even though the Treasurer has stepped in and the ATO will delay the credit card move for a year, the backlash showed cracks in Labor’s united front.
Andrew Charlton, the Assistant Minister for Science, Technology, and Digital Economy, defended the Tax Office’s original decision to stop taking credit cards. Some of his colleagues did not.
Housing Minister Clare O’Neil said the government had ‘some real concerns’ about the ATO’s proposal. She noted that many small businesses use credit cards to pay tax bills as a way of managing their cash flow.
Anne Aly, the Minister for Small Business, said small businesses were ‘rightly shocked’ by the ATO’s original decision, and that the ATO should keep talking to ‘find a way forward’.
Meanwhile, Treasurer Jim Chalmers and Assistant Minister for Productivity, Competition, Charities and Treasury Andrew Leigh refused to comment when asked earlier in the week.
Opposition leader Angus Taylor rightly observed that Labor’s responses have been ‘all over the shop’.
So far, the focus has been on small business. The same rule has now reached households that need two incomes to function.
Childcare is how a lot of families keep both parents in paid work. In late July the Australian Childcare Alliance said it had sought an exemption for early childhood education and care, which was refused. It advised childcare centres to push families onto bank transfer or another fee-free option.
Mums and dads living from payday to payday have lost the card that carried them to Thursday.
Some expensive Sydney and Melbourne private schools have dropped credit cards for fees rather than absorb the merchant charges.
The surcharge ban does not require organisations to accept credit or debit card payments.
Labor has no excuse for the fallout and their backflip. They put the idea on the political agenda first, but only for debit cards. The ban was supposed to be subject to the RBA’s work and ‘safeguards’, this would mean small business was not left holding the cost. It was framed as cost-of-living relief, with $2.1 million extra for the ACCC to chase excessive fees.
The RBA then went further than the original idea, and by now, everyone reading knows that how that played out in the real world for businesses and customers. Basically, the RBA followed the European interchange cap and landed in the same place as Europe on surcharging. It probably wasn’t a good idea to copy their notes…
The delay on implementation announced by the ATO today doesn’t mean the problem won’t go away. Watch this space for more blame-throwing at the RBA for what was essentially Labor’s policy.
As the full impact of the surcharge ban is felt, Labor is in trouble. It’s not just an issue for the 2 per cent of taxpayers that Andrew Charlton claims pay their tax with credit cards. For mums and dads, the hits just keep on coming.
Dr Michael de Percy @FlaneurPolitiq is the Spectator Australia’s Canberra Press Gallery Correspondent. If you’d like to support his writing, please shout him a drink over at Donorbox.
The post Labor’s credit card surcharge fiasco hits mums and dads appeared first on The Spectator Australia.
