Anthony Albanese accused of lying after predicting coffee shop prices may fall due to card surcharge ban

Liberal leader Angus Taylor accused Anthony Albanese of lying after the Prime Minister posted a video on social media boasting that a ban on credit and debit card surcharges would save you money “every time you tap” and claimed “from tomorrow, your morning coffee could be cheaper.”

Under a rule that began on Thursday, businesses aren’t allowed to charge customers extra for paying by card, whether in person or online.

With interest rates rising and inflation still high, the government saw the change as an opportunity to deliver positive news for consumers.

In a promotional video posted on social media, Mr Albanese said card surcharges cost shoppers $1.6 billion a year. “From today they’re banned, saving you money every time you tap,” he said.

But the Reserve Bank of Australia, which regulates the payments system, has said that “businesses will still incur costs when accepting card payments”.

Mr Taylor said prices would not fall because businesses would have to cover extra bank charges caused by the change and would pass it on to shoppers.

“Lies,” Mr Taylor said on X in response to Mr Albanese’s video. “Simply shifting costs around the economy doesn’t make families better off.”

Sydney coffee shop owner and roaster Destiny Choutis said she would reluctantly have to raise prices because about 98 per cent of her customers paid by card and were previously charged an extra 1.3 per cent.

“We’re trying not to,” she said. “But of course we’re going to have to.”

‘Pack of rottweilers’

Compounding the problem for businesses, the tax office said it would no longer accept payments by credit card.

The Coalition and One Nation immediately called for the decision to be reversed, arguing it was unfair on small operators who often relied on credit to keep their businesses operating.

“The Prime Minister and Treasurer promised Australians a cheaper coffee,” Senator Hanson said. “Instead, it’s more expensive than the old surcharge, while small business is going to be squeezed by the ATO.”

Shadow treasurer Tim Wilson linked the tax office change to the Budget deficit, which is forecast to be $31.5 billion this year, saying it was part of a broader decision to pursue businesses harder for revenue.

“Labor has set the ATO on to the small businesses like a pack of rottweilers,” he told News24. “Because they can’t control their spending, so they need to get additional revenue from somewhere.”

Sydney MP Allegra Spender also opposed the change and said she would ask the tax office to reverse it.

‘Easy target’

The tax office, which is also not allowed to charge extra for payments made by cards, acknowledged the cost of those transactions would have ultimately be born by taxpayers.

“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,” it said in the statement announcing the policy change.

The government estimates 2.3 per cent of tax payments were made by credit card in 2024–25, although the figure is likely skewed by large corporations that pay their taxes using cash transfers.

Although they aren’t covered by the new rule, American Express, JCB and UnionPay have agreed to remove surcharges too. Taxi companies, which are regulated by state governments, are not included in the ban.

Ms Choutis, the coffee shop owner and roaster, said the tax office’s ban on credit card payments was a “big issue” because some customers for her coffee beans paid on credit. While waiting to be paid, she needed the option of covering her quarterly tax bills using credit too.

“I think businesses have been an easy target at the moment,” she said. “My concern is what’s going on out there in the economy. Consumer confidence is challenged. People are cutting back on the little luxuries.”