Environment Minister Murray Watt has refused to concede the federal government's credit card surcharge ban is hurting small businesses, even as operators warn a cascade of rising costs has left them teetering on the edge — and as the Australian Taxation Office moves to stop accepting credit card payments for tax debts altogether.
Watt faced sustained questioning on Friday morning from breakfast television host Nat Barr, who pressed the minister repeatedly over growing industry backlash to the ban, which prohibits businesses from passing credit card processing fees directly on to customers.
ATO Decision Adds Fuel to Surcharge Ban Backlash
The controversy deepened this week after the ATO announced it would no longer accept credit card payments for tax debts from 30 November — a move that critics say exposes a glaring double standard at the heart of the government's policy. While small businesses are being told to absorb card processing costs themselves, the nation's tax authority is effectively doing the opposite by simply refusing to take credit card payments at all.
Barr challenged Watt over reports that the ATO's consultation with business groups on the decision had been little more than a formality. The minister insisted the government expected genuine engagement from the agency.
"It's got to be meaningful, it's got to involve listening to people, and that's exactly what we expect of the ATO," Watt said. He added that relevant ministers were still in discussions with the tax office and would make the government's expectations clear.
When asked whether the government was putting pressure on the ATO to change course, Watt said: "We were very clear with the ATO when they first proposed this that they needed to have a transition plan, that they needed to work properly with the business community, and I'm sure that those expectations will be reinforced."
The ATO's credit card payment ban has already been slammed as a fresh blow to small businesses struggling to manage costs across the board.
'Who Is in Charge?': Opposition Targets Government Inconsistency
Opposition deputy leader Jane Hume seized on what she described as contradictions within the government's own ranks. She noted that Housing Minister Clare O'Neill had publicly expressed concern about the ATO's decision, while Cabinet Secretary Andrew Charlton had backed it — a split she said reflected deeper confusion about who was actually driving policy.
"The real question in here is who is in charge?" Hume said. "The ATO is a government agency and Murray, you're the government. You can change this with a stroke of a pen. You can change this with a decision."
Hume described the surcharge ban as potentially "the straw that broke the camel's back" for small businesses already navigating steep increases in insurance premiums, interest rates, wages, electricity bills and fuel costs.
"The absurdity of Jim Chalmers' credit card surcharge ban is of course that they're expecting small businesses to absorb the increased cost of credit cards but they're telling the ATO that they can do something different," she said. "The inconsistency and the hypocrisy abounds."
Watt Argues Impact Has Been Overstated
Watt pushed back on the characterisation that the ban was placing widespread financial strain on small operators, arguing the overall cost of surcharges had actually fallen under the government and that the majority of businesses had never charged a surcharge in the first place.
"More than four out of five businesses do not already charge surcharges. So the idea that every small business is now absorbing a charge is simply not correct," he said.
Barr was unconvinced, pointing out that businesses now had no choice but to swallow card processing fees rather than recover them from customers. Small business owners who had spoken publicly about their situation described a perfect storm of cost pressures — with the surcharge ban arriving on top of already punishing increases across insurance, energy, wages and financing.
With the ATO's credit card cut-off date approaching and internal government divisions on display, the debate over the surcharge ban shows little sign of being resolved before the policy's broader impact becomes clearer to operators nationwide.
