Jane Hume puts Murray Watt on spot over ATO decision to ban credit card payments as Labor MPs break ranks

Labor’s division over the Australian Tax Office’s ban on credit card payments has deepened after Murray Watt said he stood by the decision despite growing concern from within government about the impact on small businesses.

The Environment Minister said the ATO’s decision was independent but acknowledged the government expected the agency to properly consult business and provide a transition plan.

“I mean, this is an independent decision from the ATO. And when they made clear that they intended to proceed with this, we insisted on them having a good transition plan with the business community and to consult with the business community about that,” Mr Watt told Sunrise on Friday morning.

“It’s got to be meaningful. It’s got to involve listening to people. And that’s exactly what we expect of the ATO when the ATO has done that.”

Mr Watt’s comments come after the policy prompted a Labor split as Housing Minister Clare O’Neill raised her concerns while Cabinet Secretary Andrew Charlton backed the ATO’s position.

Opposition leader Jane Hume accused the Albanese government of inconsistency, arguing small businesses were being asked to absorb credit card costs.

“This is potentially the straw that broke the camel’s back. The absurdity of Jim Chalmers credit card surcharge ban is, of course, that they’re expecting small businesses to absorb the cost of the increased cost of credit cards, but they’re telling the ATO that they can do something different,” she told host Natalie Barr.

“But the real question here is who is in charge? I mean, 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.

“Small businesses are crying out for a change. They are asking for your help. You’ve already increased their taxes. You’ve already increased their energy bills. You’ve already increased their rents. They cannot absorb this anymore. And you can change it. You just have to have the will. And you can’t blame the ATO. They’re your agency. You’re the government. You can do this.”

But Mr Watt rejected Hume’s suggestion the government had imposed an additional burden on small businesses and pointed to reduced payment processing fees.

“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,” Mr Watt said.

The dispute has also widened beyond the ATO, with warnings that councils could consider restricting or banning credit card payments because of the costs involved.

When asked whether the government had got the credit card surcharge policy wrong, Mr Watt replied: “No”.

“One of the things that’s been ignored in this debate, Nat, is that the processing payment fees that banks charge to their business customers have been significantly reduced as part of this change,” he added.

“So the idea that people that small businesses or councils or anyone else is all of a sudden having to having to absorb all of those charges is simply not correct.

“Their payment fees have been reduced as a result of this change. And if businesses are and if businesses are jacking up their prices significantly for that, then they need to justify that for their customers when their own payment processing payments are being reduced.”