Matters of Urgency — Small Business

Varun Ghosh

The Senate will now consider the proposal, under standing order 75, from Senator Cash, which is also shown at item 13 on today's Order of Business:

That, in the opinion of the Senate, the following is a matter of urgency:

The Albanese Government's staggering incompetence in pretending that banning credit card surcharges eliminates transaction costs, when those costs are merely hidden from consumers or passed on through higher prices, while the Australian Taxation Office refuses to absorb those same costs and instead plans to stop accepting credit cards, exposing how utterly clueless Anthony Albanese and Jim Chalmers are about running a small business.

Is consideration of the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

With the concurrence of the Senate, the clerks will set the clock in line with the informal arrangements made by the whips.

Michaelia Cash

I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The Albanese Government's staggering incompetence in pretending that banning credit card surcharges eliminates transaction costs, when those costs are merely hidden from consumers or passed on through higher prices, while the Australian Taxation Office refuses to absorb those same costs and instead plans to stop accepting credit cards, exposing how utterly clueless Anthony Albanese and Jim Chalmers are about running a small business.

Just when you think the Albanese government couldn't possibly demonstrate any greater ignorance as to how a small business in Australia runs, along comes the Prime Minister and the Treasurer of Australia, and yet again we are proved wrong. As a small-business owner said to me on the weekend, and I have no doubt that they were expressing the views of so many small-business owners across Australia, you cannot script this—insert your own expletive—show! These two economic geniuses, our prime minister and our treasurer, seem to now believe that they have discovered a new revolutionary principle of economics. It's this: if you ban a credit card surcharge, apparently the cost of processing that transaction simply disappears. Brilliant! So why is it that Australian small-business owners didn't think of this years and years ago? That would be because Australian small-business owners live in the real world. They wake up every day in the real world and they are smarter, without any doubt in terms of running a small business, than the Prime Minister of Australia and—God help them!—our hapless treasurer.

They understand that you're not waving a magic wand and suddenly these costs disappear. They understand that the processing costs don't disappear. The banks are still charging them. Somebody still has to pay them. And that's really worked out well for this government, hasn't it? At this point in time, the government have made this very clear to small business: 'We've hidden the cost. You can't charge it. You still have to actually pay the bank for the processing fee, and you will have to absorb it.'

You could not script, though, the fact that the ATO, the Australian Taxation Office, a government department, then came out themselves and said: 'Oh, good God! Well, the cost of absorbing these processing fees is so high that we are now going to ban credit card payments.' You could not script that if you tried. What did Mr Albanese and the Treasurer do? They smiled at the ATO and said, 'Well, you can have it your way?' And they looked at small-business owners, the men and women of Australia who get up every single day and do what we need in this country—run a small business, take risk and employ people—and said: 'It's bad news for you. You have to absorb it.'

Small-business owners are now saying, 'Well, that's great, but the bad news is this: we'll have to close down in some cases, which means our employees will lose their jobs.'

A business that has to close employs no-one. Sadly, Mr Albanese doesn't seem to understand that small fact. And here is the alternative. So much for Mr Albanese's cost-of-living measure, because what did other businesses say? 'Well, you know now what we're going to have to do: we will increase our costs.' So that coffee that was costing you $5.12 is now costing you $5.50, is now costing you $5.80. That is how quite frankly stupid this government is when it comes to understanding how small businesses in this country run.

Perhaps the Prime Minister and Mr Chalmers should just try running a corner shop for one week. On second thought, they probably shouldn't. And do you know why? This is how it would go. On Monday they'd have to hire three consultants to tell them how to actually open the front door to the business. By Tuesday they would have established a committee to understand why nobody was coming into their business. On Wednesday they would have introduced a new tax on customers coming into the business. On Thursday they would have said, 'Well, this isn't going well,' and then they would have looked to blame the previous owners. By Friday their small business, based on their record and their total and utter lack of understanding of how a small business in this country operates, would be bankrupt. The employees would be out of work. But guess what. The Treasurer would be there, holding the press conference, looking the Australian people in the eye and telling them how well everything was going.

Well, it's not going well for small businesses in this country. They deserve a government that understands the difference between running a business and running a press conference, and it is quite time the Prime Minister and the Treasurer started to understand that.

Ellie Whiteaker

I rise to speak against this motion. It's quite astounding for Senator Cash and the Liberal Party to come in here and say that they want Australians to pay more when they tap their cards. That's not something that our government agrees with. You know what's nice? You know what I think Australians will appreciate when they go to tap their card as they pay? I think they will appreciate that they don't have to pay a hidden surcharge—because it was always just a little bit sticky. Sometimes you'd go to pay and you'd think maybe your coffee was $4.50 or $5.12 or what Senator Cash said—I think she's buying expensive coffee in Perth's western suburbs—and then sometimes there'd be a charge added on top. That's sneaky.

We know that the vast majority of small businesses were not passing those charges on. I think something like 84 per cent of businesses were absorbing that cost themselves. And now our government has made it really clear that we don't want Australians to pay more when they tap their card. You shouldn't have to pay more if you decide to pay with your card than if you are paying with cash. It's of course not a small amount on its own, but, when times are tough, when Australian families are struggling with the cost of living, those small costs at the cafe when you're buying a coffee, at the servo, at the chemist add up. I think people just got used to it, perhaps accepting it as part of making a purchase.

I'm really proud of this change. I'm really proud that we have recommended that the RBA look into this issue, because there is no more important time for us to think about all the ways that we can help Australians who are struggling with the cost of living, and ultimately that's what this change is about. Card surcharges were costing Australians around $1.6 billion every single year—$1.6 billion being paid by ordinary families, by young people. That's $1.6 billion that comes out of a household budget for no reason other than they chose to use their card instead of cash. And we know cash is just not king anymore. I can't really think of anyone I know who carries cash around these days unless they're buying off Facebook Marketplace.

Now here's the part that Senator Cash and the Liberal Party like to leave out. These reforms are expected to save businesses $910 million a year. I'll help them along the journey because I think they need a bit of assistance.

In late 2024, our government said that we were prepared to ban surcharges on debit cards. We were clear that this would be a decision that would be subject to further work by the Reserve Bank and that there should be appropriate safeguards to make sure that both consumers and small businesses—ordinary Australians and small businesses—came out ahead. The Reserve Bank went away and did that work and decided that the best path forward was to remove surcharging on both debit and credit cards. That change, of course, kicked in just a few weeks ago.

The RBA is also—and this was left out, by Senator Cash, conveniently, in her contribution, and in their media blitz on this issue in recent days—lowering the cap on interchange fees, which are the fees that businesses end up paying every time a customer taps their card. Yes, you heard that right. You didn't hear that from Senator Cash earlier, did you? That's lower fees for businesses. On top of that, payment companies and the banks are now required to be more transparent about the costs that they are charging, so that small businesses can shop around and find a better deal.

When you put it all together, it's a pretty sensible set of reforms. It means Australians pay less when they go to the checkout, whether that's at a coffee shop or at a chemist. It means that small businesses are paying less to the banks when customers use their cards. It means lower costs for Australians and lower costs for small businesses. I'll remind you that 84 per cent of small businesses were absorbing this fee already. So those businesses will be better off under these changes, because they will see lower interchange fees from their bank.

Sometimes I wonder why those opposite are so determined to undo this—lower costs for shoppers; lower overheads for businesses; more transparency from the banks. But what I know is that the Liberal Party and Senator Cash want Aussies to pay more—more for their groceries, more for medications, more to see their GP and more at the checkout. We don't.

Vanessa Bleyer

A family in Tasmania who owns a small business—a restaurant business named Stelo, at Launceston, that makes house-made pasta using Tasmanian produce—is losing sleep at night right now, and that's because they are staring down the barrel of closing down their business, due to not being able to use their credit card to pay the ATO. They're a seasonal business. There are plenty of seasonal businesses, not just in Tasmania but across the country, and the way that many of these seasonal businesses operate is that, during the quieter months, during the cooler months, they pay their tax by credit card, and then, in the warmer months, in the busier months, they can pay off their credit card and pay their tax out of their own pocket, and so the cycle goes on. This family is a dad, who's a head chef, a mum who is in charge of front-of-house at the restaurant, and three kids in primary school.

This is just one example of families who are looking at closing their businesses by this time next year as a result of not being able to pay their tax—as a result of not being able to pay their debts as and when they fall due—if the ATO sees its promise through and stops accepting credit card payments for tax from 1 July 2027. Then this Labor government will have been complicit in the closure of small seasonal hospitality and tourism businesses across this country.

Jacinta Nampijinpa Price

I stand in support of this motion. It is clear that the Albanese Labor government does not understand small business, as has been evident this week. Treasurer Jim Chalmers and the Albanese government have been forced, once again, to backflip on a poor policy decision. Surprise, surprise!

The credit card surcharge ban and the ATO credit card debacle are just the latest examples of Labor's inability to consider the consequences of their actions. Prime Minister Albanese promised Australians they would save money every time they tapped their cards. But banning a credit card surcharge does not magically make the underlying transaction costs disappear. These costs must still be paid by someone. That someone is either the small businesses wearing the cost or Australians ultimately paying more at the check-out. Small businesses are the backbone of our community. They deserve a government that recognises the realities of running a business, not one that leaves them struggling with yet another unnecessary bill.

Labor's lack of consultation is absolutely evident in the ATO's backflip, delaying these changes until 30 June 2027. This capitulation raises the obvious question: why wasn't industry properly consulted before these changes were announced? It feels like deja vu. Why didn't the Albanese Labor government actually listen to small businesses, who have been crying out for help and support from their government? Instead, this ATO credit card debacle has added unnecessary stress and angst when small businesses already have enough to worry about. For many small-business owners, the ability to pay a tax bill by credit card helps manage cash flow during difficult periods, as we just heard. Removing that option only makes an already challenging situation even harder.

The ATO has estimated that absorbing credit card processing fees would cost the government around $200 million a year and declared that it is not tenable for the ATO to absorb the costs associated with accepting credit cards on an ongoing basis. No kidding! It is also not tenable for small businesses to have to absorb these costs. A small-business owner, Glen, recently told me that some of his suppliers are now refusing to accept card payments. Surprise, surprise! This is called the knock-on effect. Some are adding new admin fees at 1.5 per cent, and others are saying, if Glen's business needs to use a card payment, the fees still apply. It's as clear as mud for some small businesses trying to do the right thing and play by Labor's rules and shifting goalposts, which they were not consulted about once more.

Small businesses need a government who knows the pressures of running a small business, not one that places even more burdens on them. The Labor government seems to have made a real habit of announcing first, listening second and backflipping third. Small businesses deserve better.

Long debate text truncated.