Peter Stefanovic:
Joining us live this morning the Assistant Treasurer, Financial Services Minister, Daniel Mulino, the Shadow Home Affairs Minister, Jonno Duniam. Gentlemen, good morning to you both.
So are you running up a tab on how many businesses you can actually annoy across the country at the moment, Dan?
Daniel Mulino:
Well, thanks for having me on, Pete. Can I just say, firstly, this is a really important reform that was long overdue. We were an outlier when it came to surcharges, and consumers were rightly getting aggravated that the price that was advertised wasn’t what they were being charged. So it’s very important that we’ve gotten rid of those surcharges.
What we’ve also done is removed or capped the interchange fees, and that significantly reduced the bank charges that small businesses are wearing.
Now when it comes to the ATO, I worked with the ATO, they made the decisions around implementation and design, but we insisted as a government that there be a transition period and that they negotiate along with the RBA with card companies to get the best possible deal.
There was a transition period of 2 months. But when that was announced I heard loud and clear, as did the government, from small business that that wasn’t enough. And then we worked with the ATO to fund a longer transition period until 30 June next year. And we will work on an arrangement going forward beyond that point for companies, small businesses that need flexibility going beyond that point.
Stefanovic:
Let me back up a few points there. Do you recognise that many small businesses rely on credit cards to manage cash flow particularly when they are waiting for overdue invoices to be paid?
Mulino:
So what I would say is that small business is going to have a range of payment methods available including BPAY, bank transfer, debit cards. They can still use credit cards through a third‑party provider, and that’s the way that this works in the US. So we’re basically adopting the same approach as the US.
When you look at other major advanced economies, they will generally allow credit cards directly, but they will charge a processing fee.
Now we did not want to go down the path of the ATO charging a processing fee, so instead we’ve gone down the path of retaining all the other payment methods, but we also allow a credit card through third‑party providers.
There are also a range of measures, flexible measures whereby the ATO will give small business transition periods or payment paths if they need it. So there’s a whole range of measures.
Stefanovic:
All right.
Mulino:
But what is not realistic is what the Opposition Leader has put forward as a thought bubble, which is to say that the Australian taxpayer should just wear this indefinitely. That is not realistic.
Stefanovic:
Okay. But you recognise that they use – businesses, small businesses used credit cards in the past to kind of bridge the gap between payments from their customers and their own tax payments.
Mulino:
Yes. Our estimates are that about 5 per cent of businesses had used credit cards in the previous financial year, and so what we’re doing is we’re putting in place a long transition period, and we will come up with arrangements beyond 30 June next year that allow for situations where there is hardship or where there is a need for flexibility.
Stefanovic:
Okay. Well, that leads me to the next point, and Jonno, I will come to you in just a moment, but Dan, will you ask the Tax Commissioner to negotiate lower fees with credit card providers so the ATO can continue accepting credit card payments?
Mulino:
So that has been going on since May. The ATO and the RBA have been in intense discussions with the credit card companies. They didn’t get to the point in the lead‑up to the decision made in late September where the deals were good enough to offer value for money for taxpayers. But those discussions continue, so I’m very hopeful that we will continue to see progress in those discussions.
That was one of the things that I engaged with the Tax Commissioner on, and both the Tax Commission and – the ATO rather – and the RBA have taken action on that.
Stefanovic:
So when do you expect to have a more permanent solution sorted out?
Mulino:
So the Treasurer and I asked the Commissioner to work on different arrangements for – different options for what we might have in place going beyond 30 June next year.
Stefanovic:
Yeah, so when –
Mulino:
That’s a priority. So I think – we don’t have a particular timeline, but that’s a priority for the ATO. I’m hoping it’s a matter of weeks, not months.
Stefanovic:
Okay. Jonno, you’ve been very patient, and I appreciate that. What are your thoughts on all of that, and for what a solution should be here?
Jonathon Duniam:
Yeah, no, look, it’s been entertaining, thank you, Pete. But what I would say is, I mean if you listen to that, anyone would think that the government isn’t in charge, all of this stuff’s happening around government and they’re just passengers on this journey.
They’re the ones that make decisions, they’re the ones who sign off on policy, they’re the ones who can change what’s going on here, so they can actually provide certainty for small businesses, they can actually put in place permanent arrangements.
And to your initial question to the Assistant Treasurer just earlier on, I mean how many businesses are they going to annoy. Not only did they say that they did this to try and reduce the aggravation, the pressures on consumers, that’s gone, they are actually worse off as a result. Now, as you’ve just outlined through all of those questions, small businesses, of course, are bearing the brunt of this, are losing options when it comes to managing cash flows.
There are a range of things government could do. And to that end, I just don’t under why they don’t get on and do it, frankly. A lot of talk, no action, people worse off.
Stefanovic:
So just to pick up on Dan’s point though, is it fair for taxpayers to ultimately pick up the, what, $200 million tab here, to keep picking that up?
Duniam:
Well, at the moment they’re paying for it anyway through consumption, businesses through interest on repayments to the tax office. Because of course the tax office set that exorbitant interest rate which is far higher than the 30 days you might get interest free on your credit card, that’s gone because of Labor.
So of course these things need to be paid for, but we’re talking about government services, services to the Australian people, internal costs, and somehow we’ve got to go and find more money to pay for this rather than use existing resources.
The government collect enormous amounts of tax now, they don’t need to tax people more, it’s not additional funding. They should use some of the money they spend on green hydrogen or renewables projects to offset this cost.
Stefanovic:
Dan, why do you or your government continue pursuing a plan to make decisions and consult later, because for many it reeks of incompetence?
Mulino:
No, no, I don’t think that’s the case, and there’s a whole bunch of policies that we’ve put in place that have very long lead times. So if you look at the tax policies that we’ve put in place, a lot of them have 1 or 2‑year lead times.
If you look at some of the major measures in relation to superannuation in my portfolio there’s been extensive consultation with all different parts of the financial services sector. And we ended up landing a significant package which was signed up to by pretty much all different stakeholders across the sector and consumer groups. So it’s a government that is engaging right across the board.
Look, what I would say in relation to this issue though, Pete, just to take up the previous point, is that the Opposition talks the talk on responsible economic management, but just about every savings measure that comes into the parliament they hyperventilate about, they support almost no responsible savings. And then when it comes to this measure –
Stefanovic:
Well, isn’t it because you save and then you just spend elsewhere?
Mulino:
– suddenly it’s completely –
Stefanovic:
So it’s not really a saving?
Duniam:
Reprioritisation, yeah.
Mulino:
No, no, well look, but if you look at the bottom line, the amount of debt and the fiscal trajectory is about $200 better off than –
Duniam:
Australia is so much better off.
Mulino:
– the one we inherited. So I get that people are doing it tough. But when it comes to the Opposition, what we basically have from the Opposition is a leader‑in‑waiting outside of parliament saying we need to jack up the GST –
Duniam:
Here are the talking points.
Mulino:
We have a Shadow Treasurer who’s basically advocated for a 20 per cent GST in the parliament.
Duniam:
Master class in deflection.
Mulino:
So if they want to talk about low taxes, I think Angus Taylor has to look around those in the parliament and waiting to get into the parliament for a big taxing agenda.
Stefanovic:
Tell you what, there’s some barbs there. Go on, Jonno.
Duniam:
Look, that is a master class in deflection, and I just have had the insight into the Labor talking points for today. If it starts getting tough, start talking about Josh Frydenberg.
I mean seriously, they say they know Australians are doing it tough if they’re in business or just a household trying to pay the bills. They’re doing nothing about it except making political points around what’s happening here in Canberra.
What we should be focused on is exactly what you’ve been asking about this morning, but again, no answers, more problems, and a government that knows you’re doing it tough.
Stefanovic:
Just as a side –
Mulino:
Can I just say, Pete, that I’m looking forward to Jonno’s memoir, and I’ll read that before I read Mr Frydenberg’s –
Stefanovic:
It’s been called the ‘Festival of Frydenberg’ though, Jonno, to be fair. I mean he is everywhere at the moment. Is it a distraction for you?
Duniam:
No, look, Josh has always been everywhere; when he was here, after he left, now outside parliament, look, he’s –
Stefanovic:
Are you saying he’s a self‑promoter?
Duniam:
I’m saying he’s a larger‑than‑life character. Anyone who knows Josh knows there is a lot of Josh to go around. And we’re all interested in the things he has to say, so good luck to him, whatever he chooses to do.
Stefanovic:
Do you want to see him back in the party?
Duniam:
Oh, I think he’d be an amazing contributor. So if he wants to put his hand up, I look forward to hearing the day that he announces putting his foot forward for pre‑selection. I think he’d be an amazing contributor, and I hope he knocks off the Member for Kooyong.
Stefanovic:
Okay, there you go. Jonno, Dan, appreciate that.