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Hanson and Spender unite against ATO ban on credit card tax payments, as minister blames 'profiteering' card companies

The Reserve Bank's new surcharge ban, taking effect from October 1, has triggered a backlash from small businesses and politicians who say the ATO's November 30 cut-off for credit cards will hurt taxpayers.

By LineZotpaper
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Updated
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Sources3 outlets
One Nation leader Pauline Hanson and teal MP Allegra Spender have issued a rare joint demand for the Australian Taxation Office to reverse its plan to ban credit card payments for tax bills, as Industry Minister Tim Ayres blamed 'profiteering' credit card companies for forcing the move.

The Reserve Bank of Australia on Thursday banned surcharges for Mastercard, Visa and eftpos networks, following a Labor campaign the government said would save consumers $1.6 billion a year. From October 1, merchants can no longer charge additional fees at checkout. The move immediately drew backlash from small business operators who say they will be forced to pass charges along to consumers in the upfront cost of goods and services. The RBA argues the transfer will inflate costs by around 0.1 per cent.

The ATO subsequently announced a plan to ban credit card transactions from November 30, stating: "As a government agency, the ATO has decided it would not be appropriate for the cost of credit card merchant fees to be transferred to the community."

The tax office said only 2.3 per cent of tax payments were made with credit cards in the 2024-25 financial year, and that 60 per cent of those charges were made by large organisations.

Industry Minister Tim Ayres defended the move on Friday, telling News24: "The credit card companies are charging too much, and that is a charge, ultimately, on the taxpayers because the ATO has to pay it. It's a charge on Australian taxpayers. It's not the right thing to do. There are alternative ways of paying, and the ATO will work through that with their customers and their stakeholders."

Spender on Friday criticized the decision, arguing it would penalize Australians who rely on credit cards to manage cash flow.

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Analysis

Why This Matters

  • The ATO ban could force individuals and small businesses to find alternative payment methods, potentially causing cash flow difficulties for those who rely on credit card rewards or grace periods.
  • The rare cross-bench alliance between Hanson and Spender signals significant political pressure on the government from both populist and moderate independents.
  • The row extends the ongoing controversy over the RBA's surcharge ban, which small businesses say will push costs onto consumers through higher prices.

Background

The Reserve Bank's October 1 ban on merchant card surcharges was intended to eliminate surprise fees for consumers at checkout, saving an estimated $1.6 billion a year. The ATO's separate decision to stop accepting credit cards from November 30 is described as a move to avoid passing merchant fees to taxpayers. The government argues credit card companies are profiteering from the fees, while critics say the ATO is reducing payment flexibility for taxpayers without adequate consultation.

Key Perspectives

[Pauline Hanson and Allegra Spender]: Represent a rare political unity across the spectrum, arguing the ban hurts taxpayers and small businesses that depend on credit cards for managing tax payments. They want the ATO to reverse its decision. [Minister Tim Ayres and the government]: Defend the move, blaming credit card companies for charging excessive fees that ultimately burden taxpayers. The government says alternative payment options exist and the ATO will work with stakeholders. [Small business operators]: Already angered by the broader surcharge ban, they say the ATO's move adds another layer of cost and inconvenience, potentially forcing them to pay taxes using more expensive or less convenient methods. [Reserve Bank and ATO]: Argue the changes will reduce hidden fees for consumers. The ATO notes only 2.3% of tax payments were made by credit card last year, mostly by large organizations.

What to Watch

  • Whether the ATO modifies the November 30 deadline or offers exemptions for small businesses or individuals under financial stress.
  • The level of further political pushback from cross-bench MPs and small business lobby groups in the coming weeks.
  • The actual impact on consumer prices as merchants adjust pricing to absorb or pass on costs from the surcharge ban.

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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