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Chalmers denies Albanese rolled him on ATO credit card payments

Prime minister reveals he acted after ACCI boss texted him, fuelling speculation of a rift

By LineZotpaper
Published
Read Time2 min
Sources2 outlets
Treasurer Jim Chalmers has denied being overruled by Prime Minister Anthony Albanese after it emerged Albanese personally intervened to delay a controversial tax office ban on credit card payments, acting on a text message from business lobbyist Andrew McKellar before stopgap funding was announced.

Treasurer Jim Chalmers has denied being rolled by Prime Minister Anthony Albanese after the prime minister personally intervened to stop a tax office ban on credit card payments, a day before stopgap funding was announced. Albanese revealed at Parliament House on Tuesday night that he acted after receiving a text message from the boss of the Australian Chamber of Commerce and Industry, Andrew McKellar, last Thursday morning. By Friday morning, the government had announced funding to allow credit card payments to continue until the end of the financial year.

Chalmers had previously announced new funding to ensure the Australian Taxation Office could continue accepting card payments, following sustained criticism of the government's handling of the ban. The tax commissioner, Rob Heferen, announced earlier this month that the ATO would stop accepting credit card payments from 1 December, following a ban on surcharges announced by the Reserve Bank. Heferen said continuing to accept card payments would cost the ATO almost $200 million a year, as those costs could not legally be passed on to card users.

Speaking on Wednesday morning, Chalmers said the prime minister and he were in discussions on Wednesday of last week. "He had a view and I agree with it, that we needed to step in to provide this longer transition period to allow the ATO the time to get it right. We had the same view," Chalmers said.

The ATO is an independent authority and the government cannot direct the tax commissioner's decisions. Some business owners, particularly smaller operators, use credit card payments as a cashflow tool, managing their liabilities by using credit when required. Estimates suggest about 5 percent of small businesses use credit card payments for tax bills.

Albanese said McKellar's text was "an example of a relationship that takes time to develop. That trust, where you can have a discussion and say 'it is in hand, I agree with what you are saying and I will get it done'."

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Analysis

Why This Matters

  • The dispute highlights internal tensions within the Albanese government, with the prime minister acting on a direct approach from a business lobbyist before the treasurer had publicly resolved the issue.
  • The ban on credit card payments affects small businesses that rely on credit as a cashflow tool, and the government's backflip may have political consequences with both business owners and fiscal conservatives.
  • The episode raises questions about the independence of the ATO and the government's ability to manage policy decisions that have direct financial impacts on businesses.

Background

The ATO had announced it would stop accepting credit card payments from 1 December, following a Reserve Bank ban on surcharges. The ATO said continuing to accept card payments would cost it nearly $200 million a year because those costs could not be legally passed on to card users. After business outcry, particularly from smaller operators who use credit cards to manage cashflow, the government announced stopgap funding to allow the payments to continue until the end of the financial year. The prime minister later revealed he acted on a text from the head of the Australian Chamber of Commerce and Industry, Andrew McKellar, leading to suggestions Albanese had undermined Chalmers.

Key Perspectives

Treasurer Jim Chalmers: Denies being rolled by the prime minister, saying they were in discussion and agreed on the need for a longer transition period. Prime Minister Anthony Albanese: Portrays his intervention as a successful example of his relationship with business, acting swiftly after a text from ACCI boss Andrew McKellar. Critics and business groups: The delay is welcomed by businesses that rely on credit card payments, but the episode has exposed the government's messy handling of the decision and raised questions about who sets tax policy.

What to Watch

  • Whether the ATO will finalise a permanent arrangement for credit card payments beyond the end of the financial year.
  • Any further signs of tension between the prime minister and treasurer, particularly ahead of the next federal budget.
  • The ongoing relationship between the government and business groups, with the ACCI credited for securing a rapid policy reversal.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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