Labor ministers contradict each other over ATO credit card surcharge ban

Business leaders have demanded the government clarify its stance on the Australian Taxation Office’s sudden removal of credit cards as a payment method, after Labor ministers contradicted each other over the move.

The tax office surprised small business owners earlier this month as the Reserve Bank of Australia’s ban on credit card surcharges came into effect. The ATO said it would stop taking credit card payments for tax bills from November 30, arguing it could not absorb the fees.

The ban, which Prime Minister Anthony Albanese has spruiked as a cost-of-living measure that would save households $1.6 billion a year, has incurred the wrath of small businesses and the opposition. Small Business Minister Anne Aly was the first to raise concerns over the ATO’s move on Wednesday, urging the tax office to consult more widely about the ban’s implementation.

Cabinet minister Clare O’Neil weighed in on Thursday morning, saying the government had “some real concerns about what the ATO is proposing to do here”.

“Small businesses across the country really struggle to manage their cash flow, and I know that partly because I grew up in a household where both my mum and my dad ran their own small business,” O’Neil told Nine’s Today show.

The comments put her at odds with Assistant Minister for the Digital Economy Andrew Charlton, who shortly afterwards said the government “supports the ATO’s decision” and that the tax office was ensuring consistency between the public and private sectors.

“They don’t want the people who are not paying by credit card, which is 98 per cent of taxpayers, to be subsidising those that do,” Charlton told ABC radio.

The confusion sparked calls from the Australian Chamber of Commerce and Industry for the government to show leadership and provide businesses with certainty.

“We want a response, and we want one clear outcome which is consistent across government,” chief executive Andrew McKellar told reporters in Canberra.

“We don’t want to see agencies like the tax office going alone and acting in this way.”

McKellar said while the tax office has argued the change would only affect 5 per cent of businesses, that figure represented a quarter of a million small businesses.

The ATO stood by its decision after meeting with stakeholders on Wednesday, in a consultation that McKellar said was fruitless.

Opposition Leader Angus Taylor said on Thursday that Labor was “all over the shop”.

“We’ve had the housing minister in one place, the small business minister somewhere else, and the de facto treasurer has been defending the ATO,” Taylor said.

“But they should, from today, get rid of the ban, axe the ban that they’ve put on the ability of small businesses to pay tax with their credit cards.”

Shadow treasurer Tim Wilson accused the government of double standards.

“The government says to small business, you’ve got to absorb these costs, but when it comes to payment systems to us, we’re not going to absorb those costs,” he told News24.

In her Thursday morning interview, O’Neil backed the Reserve Bank’s call to scrap credit card fees, saying Labor’s position was that Australians should not be charged to spend their money. But she urged the ATO to find a solution for tax bills in consultation with the business sector.

“Cash flow is the biggest thing that’s often of concern for small business, and using credit cards to pay tax bill is a way that a lot of people are just managing that issue,” the housing minister said.

“We really want the ATO to go back and talk to business about what they’ve decided to do here and think about how they can find a solution that works.”

Asked why the government was taking credit for the ban but would not resolve the problems associated with it, O’Neil said the changes were working through the system and would take time to finesse.

“Of course, there are going to be some issues as we implement it across the economy, but [it’s] a really good thing.”

Coalition frontbencher Bridget McKenzie, appearing alongside O’Neil on Today, accused the minister of “trying to walk both sides of the street”.

Independent senator David Pocock also called for the government to intervene and work with the ATO to reverse the ban.

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