James Glenday:
It’s time to get more on our top stories this morning, and we’re joined by the federal Assistant Treasurer, Daniel Mulino. Daniel, welcome to News Breakfast.
Daniel Mulino:
Good morning, thanks for having me on.
Glenday:
Can we start, first of all, with this ban on card surcharges. Can you remind us, I think this is confusing for a lot of people, when do we pay a surcharge at the moment?
Mulino:
Well, at the moment around 16 per cent of businesses charge surcharges, and this is something which understandably consumers for a long time have found very annoying; these nuisance charges really add up.
And so, the government tasked the RBA to have a look at this, and the RBA’s undertaken a really comprehensive consultation process, worked with all of the key stakeholders in this comprehensive ecosystem, and what they’ve ended up deciding is that there’s going to be a ban on both debit and credit card surcharges. This is going to lead to a benefit to consumers of $1.6 billion, which is really significant at a time when people are doing it tough.
Glenday:
I’ve noticed these at restaurants in particular. Will this simply cause a business though to then wrap in the extra cost of these charges into their prices. So, for example, if you went out to get a meal at a restaurant, are you just going to be paying a little bit more for the food instead of a little bit more on the card surcharge?
Mulino:
So what the RBA has also done is to reform the way that interchange fees are being charged, and what they’ve done is to say that the cap on those fees from banks to businesses has to be reduced from 0.8 per cent to 0.3 per cent. And that’s a very significant change because at the moment it’s small businesses that are paying at the upper end of those fees.
And so, it’s estimated that that reduction in the cap on those fees from banks to businesses will see a reduction of around $910 million.
And so what we should see for small businesses is that they will disproportionately benefit from that measure. And so, in the end it’s going to be consumers who benefit and disproportionately on the business side small businesses.
Glenday:
So you don’t think this will make some items, some meals, for example, more expensive?
Mulino:
No, I think that the RBA’s analysis is that in the previous arrangements it was small businesses who were losing out on these interchange fees, and therefore, by putting a lower cap on those small businesses will benefit, and so what we should see is that consumers should win out. The ACCC will monitor arrangements, and so we’re confident that consumers will benefit from these measures, and overall, the benefit should be very significant.
Glenday:
Just on a separate issue, the fuel tax is halved from today. We’ve already heard warnings that it might take a week or 2 for those prices to fully flow through. You’re not just the Assistant Treasurer, you’ve also got a PHD in economics from Yale. I’m curious as to your view; will this move eventually increase inflation by essentially increasing demand for fuel and putting more money in consumers’ pockets?
Mulino:
Well, look, I think I look at this through the prism of when people are doing it tough I think it’s really important that the government consider targeted and responsible cost‑of‑living supports, and this is one that I think benefits people who were doing it particularly tough, who didn’t have the capacity to avoid paying higher petrol or diesel prices.
This is a measure that will disproportionately benefit people who aren’t able to switch to public transport; for example, tradies or people in outer suburbs without access to public transport, people who can’t easily work from home, people in regional areas.
So this is a very targeted cost‑of‑living measure that is going to benefit people who were doing it the most tough from the higher petrol and fuel prices. It’s something which we can accommodate within broader budget considerations while keeping overall spending pressures low.
Glenday:
Does it eventually mean though that we’ll get a discount on fuel for a bit, but we might be paying higher interest rates in a couple of months’ time?
Mulino:
No, I think that when we consider this within the broader budget context, the government at the moment is finalising the Budget, and I’m confident that we can accommodate this within broader fiscal settings.
The government is very intent on making sure that our fiscal settings are aligned with where the RBA is headed on monetary policy.
Glenday:
Just before I let you go, and this is outside the scope of your direct responsibility, but the US President, Donald Trump, overnight has essentially urged allies to just go and get their own oil if they’re worried about the cost of fuel, particularly petrol and diesel. What’s your reaction to that?
Mulino:
Well, look, I haven’t seen that particular comment, but what I would say is that Australia has received some requests for defensive support in that region, and that’s actions that we’ve taken.
Look, when it comes to securing our oil, this is something that has come up quite often over the last few days, and the Minister for Energy has been engaging with stakeholders around the world on a daily basis to ensure that the ships continue to arrive in Australia. The number of ships, I think, has been very high, and where there have been disruptions, they’ve been more than replaced.
And I might also add that there have been significant measures passed through the Parliament which provide government support where there are financial uncertainties in relation to securing additional supplies.
Glenday:
Daniel Mulino, thanks for joining the program this morning.
Mulino:
Thanks very much.