The Australian Taxation Office’s controversial banning of credit card payments will no longer come into effect at the end of next month, after the government negotiated with the independent agency to delay the change.
Treasurer Jim Chalmers will allocate additional funds to the agency to support a year-long transition period, after the ban – which was set to come into effect on November 30 – came under heavy criticism.
The announcement comes after fierce pushback from the business community, opposition parties and some members of the Labor backbench that saw the ATO’s decision as damaging to the cash-flow management of small businesses.
Appearing on morning television on Friday, Environment Minister Murray Watt said the ATO’s plan to ban credit car payments for tax bills so as not to burden all taxpayers with the associated costs was a completely “independent decision”.
“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,” Watt told Seven’s Sunrise.
“We expect them to do that consultation properly. I mean, I think we need to keep it in perspective that when it comes to payments to the ATO, it’s only a very small number of taxpayers who pay their tax payments by credit card, it’s about 5 per cent for small businesses and about 2 per cent for individuals.”
Following the October 1 introduction of bans on credit card surcharges, the tax office surprised small business owners in announcing a November 30 cut-off date for credit card payments.
The government produced mixed messaging on the topic on Thursday, when Housing Minister Clare O’Neil shared the government’s “real concerns” about the plan, countered by Assistant Minister Andrew Charlton who said the government supported the decision.
The government offered a more unified message on Friday, with Watt joined by Foreign Minister Penny Wong, who encouraged the tax office to perform meaningful consultation on the ban, while Defence Industry Minister Pat Conroy said the ATO should “do their job and talk to small businesses”.
Wong also reiterated the independence of the tax office, as deputy Liberal leader Jane Hume questioned “who is in charge”.
“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,” Hume told Sunrise, “You just have to have the will, and you can’t blame the ATO. They’re your agency. You’re the government. You should do this”.
Several Labor MPs speaking to this masthead on the condition of anonymity shared their concerns over the way the government’s relationship with small business was being framed, but stressed the ATO had blindsided the government but were difficult to wrangle because of their independence.
“It’s just alarming that were seeing this sort of behaviour from the ATO. It’s overreach, it’s hostile they need to remember who they serve. I’m hoping that they reverse this and find efficiencies elsewhere to cover the cost,” one senator said, questioning why the Reserve Bank had not foreshadowed such moves.
Another said the ATO had likely made the right decision in finding value for the taxpayer, but had botched the transition and needed to “pull its head out of the sand”.
“People probably don’t realise how completely totally independent the tax office is of the government of the day, for good reasons, but yes, sometimes it is completely infuriating,” they said.
Concern in the Labor ranks that the party is failing to meet small business owners appears to be growing, with one particularly strident MP laying the blame directly at the feet of cabinet.
“I don’t think it’s acceptable for us to say it was the ATO’s decision not ours. If that’s the case, then there’s something seriously wrong with our government. If the ATO can dictate policy like this without government oversight and agreement, I don’t quite understand that government,” the MP said.
“I just think there is no one in cabinet with any small business experience. We have a small business minister that knows nothing about small business. We need someone with some guts to stand up to the tax office. I think it’s very, very disappointing”.
Small Business Minister Anne Aly was the first government minister to raise concerns over the ATO’s move on Wednesday, urging the tax office to consult more widely about the ban’s implementation.
One MP, who is factionally unaligned with Aly, dismissed the criticism of cabinet, saying: “This is an argument as old as representative democracy itself. I get that having that background is good, but you can’t have a government made up of experts”.
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Nick Newling is a federal politics reporter for The Sydney Morning Herald and The Age.Connect via X or email.From our partners
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