Albanese government slammed for burdening small businesses further as ATO bans credit card payments

Politicians from across the political spectrum have slammed the government’s card surcharge changes after the Australian Taxation Office (ATO) announced it would not accept credit card payments as of November 30.

The surcharge changes will see businesses blocked from passing fees on to customers, but the underlying charges to businesses remain.

WATCH THE VIDEO ABOVE: Surcharge ban sparks fury over small business costs

The shake-up has sparked backlash, with many businesses raising the price to absorb the cost involved in processing transactions.

In a statement, the ATO said it would “not be appropriate” for the cost of credit card merchant fees to be transferred to the community.

The agency will still accept payments via direct debit and BPAY from debit and cheque accounts, along with cash and EFTPOS payments at an Australian Post Office.

Community Strong MP Allegra Spender, who has previously run a small business, labelled the decision “a bit rich”.

“I know how hard it is; I’m hearing that all the time ... and it’s particularly cash flow that is really hard to manage,” she said, confirming she will be writing to the ATO to urge them to reverse the decision.

She told Sunrise small businesses often pay higher merchant fees than bigger businesses.

Deputy Opposition Leader Jane Hume said small businesses, which often use credit cards to “smooth out” large tax bills over time, simply have no choice but to raise prices to help them absorb the cost.

“Small businesses have been in the firing line of this government from day one; they’ve had higher energy costs, higher rents, increased taxes, over-regulation and now this on top of it,” she told Sunrise on Friday.

“Now they can’t pay their tax bills using credit cards, that’s another burden.”

The agency recognised that some taxpayers rely on credit card payments to manage their tax commitments and said it is “committed” to helping taxpayers transition to alternative payment methods while continuing to support those experiencing financial hardship.

Hume slammed the government for not understanding small businesses, calling the changes “the straw that will break the camel’s back”.

She said the Coalition is calling on the government to reverse the changes imposed by the ATO, labelling them “unfair”.

Card payments through the ATO currently account for approximately 2.3 per cent of all tax payments.

The government said card surcharges have been costing Australians $1.6 billion each year, and the ban will save money every time customers tap their cards at supermarkets, cafes or when paying bills.

However, consumers are bracing for impact, with economists warning prices will rise incrementally across the country as the changes come into effect. 

Hume hit out at the government, accusing Prime Minister Anthony Albanese of “taking Australians for mugs”.

“He promised them that this would mean that they pay less when they check out, but that’s not the case,” she said.

“Just because that cost isn’t on the receipt, doesn’t mean it doesn’t exist.”

Spender noted there are genuine costs involved in moving money around through banks and merchants.

She said the solution is not as easy as simply blocking the banks from imposing these fees in the first place, arguing they will “find another place to charge it”.