PATRICIA KARVELAS:
Now the Albanese government wants to stop businesses ripping off Australians by banning unfair trading practices under the Australian Consumer Law, which includes addressing dynamic pricing. Stephen Jones is the Assistant Treasurer and the Minister for Financial Services. I spoke to him a short time ago. Minister, welcome back to the program.
STEPHEN JONES:
Great to be with you.
KARVELAS:
I want to talk about this dynamic pricing. How was this allowed to happen in the first place?
JONES:
Look, a lot of these online ticket sellers and others have engaged in what can only be described as sharp and tricky practice; it’s emerged over time. The government’s made a firm decision that we’re going to crack down on it. Our new unfair trading regime will look at outlawing dynamic pricing, but also other sorts of really sharp practices; subscription traps, everything from streaming accounts to gym membership, which have got a big front door and a really small back door if you want to get out of them.
That’s another example of an unfair trading practice, and drip pricing is another one, one where you think you’re buying a service that’s got an advertised price, and halfway through the process the price goes up because they’re adding in other unavoidable fees and charges that should have been alerted to people in the advertising; all unfair, all sharp, all ripping Australians off and adding to cost‑of‑living burden on ordinary households.
KARVELAS:
Why didn’t the government observe that this was going on before Four Corners pointed it out?
JONES:
We’ve been working on this for around about 12 months, Patricia, whether it’s drip pricing, whether it’s subscription traps and whether it’s dynamic pricing. You might recall I published a paper in about August last year consulting on the forms that the government could put in place to update our consumer law. So a lot of work’s been going on in the background. We don’t own this outright, so we’ve got to work with the states and territories to ensure that, through the Australian Consumer Law, we can update our laws properly and lawfully. But we’ve been working on it for quite some time, and I welcome the fact that ABC through Four Corners and others have put a spotlight on these practices. Consumers have had enough, and the government’s going to act.
KARVELAS:
So will this do anything to stop people reselling tickets at significantly higher prices?
JONES:
It’s focused on the sharp practices that have been put in place principally by the originators, but it won’t be picking on one particular business; we’ll be looking at the entire economy, looking at specific practices, dynamic pricing, which is affecting everything, from getting a ticket to a sporting event to pop concerts, subscription traps, as I’ve talked about, whether they’re online or whether it’s a bricks and mortar store, looking at ensuring that it is as easy to unsubscribe as it is to subscribe, and the drip pricing stuff that I’ve talked about. We’re looking at all of these, they’ll be platform neutral, sector neutral, ensuring that we have mechanisms in place that are protecting consumers.
KARVELAS:
If you’re just tuning in, you’re listening to Radio National Breakfast. We’re speaking with the Assistant Treasurer and Minister for Financial Services, Stephen Jones. I want to change the topic to the government’s plan to scrap debit card surcharges. The plan is not even going to start for another 12 months, and of course that’s a big wait. Why does it take so long for this to happen?
JONES:
We’ve got to ensure that what we put in place to protect consumers, to ensure that they aren’t losing billions of dollars a year in these surcharged fees doesn’t inadvertently impact on small businesses, and small businesses are often in the position where they’re passing these costs on, because the bank, the payment system provider, the card network provider is imposing these costs upon them.
So we’ve got to have all of the parts together, so that we don’t get a great headline saying that we’re banning these surcharge fees, but we’re not banning the cause of the surcharge fees, which is somewhere upstream. So I’ll be working through all of that to ensure that we get the right outcome, we protect small business, we protect consumers, and these unnecessary and unreasonable surcharge fees aren’t being passed on. So we’ll do that through the right processes.
We’ve got the Reserve Bank doing a quick review over the next few months. That will provide a good evidence base for us to work upon, sending a very clear message to industry. They can move themselves, there’s nothing stopping the banks, the platform providers, the card providers for moving ahead of 1 January 2026, but we’ve sent a very clear signal to them that unless they get their house in order, we’ll be ensuring that a ban is in place.
KARVELAS:
But what happens to the cost, because obviously the reason it’s being charged is there is a cost to the system, that’s what’s been explained, right? So who ends up paying for it? Could it be that in fact people end up being charged more, there’s an increase in prices as a result of your changes?
JONES:
And that’s why we’ve got the Reserve Bank doing this study between now and the end of the year, to look at what the actual cost to the banks, to the payment system providers and the Visas, the Mastercards and the EFTPOSes of this world; what is the actual cost, what is the profit margin they’re getting for passing on these surcharges, and how much are customers being ripped off. That’s exactly what I’m talking about here. We’re going to do it properly. We’re going to do it properly to ensure that –
KARVELAS:
If they are to pass on the cost to consumers, will you ensure that that’s banned as well?
JONES:
That’s exactly what we’re going through at the moment, to get an identification of what the actual cost – all sorts of allegations are being made by the banks and others at the moment about the cost of providing this service. We’re going to drill into that, find out what the real cost of providing this service is, and how much profit margin is being bundled in on top of that. Very opaque pricing arrangements at the moment where they’ve got a blended price, you get charged the same for a debit card as you do for a credit card in many of these transactions, and that’s not a realistic reflection of the cost, so we’ll be drilling into all of that to ensure that when we put these mechanisms in place that there aren’t unintended consequences, and you don’t have the cost just being passed on and forced to absorb by small businesses.
KARVELAS:
I just want to change the topic, if we can. It’s been reported that there are several Labor MPs who see the Prime Minister’s purchasing of this house as being a mistake. Is it a bad look?
JONES:
Oh, look, these are private matters. The PM and his fiancée are getting married next year, they’ve sold a couple of properties and they’re intending to buy a new one. That’s a private matter. The housing issue that I’m focused on –
KARVELAS:
Is the Prime Minister though – let me just interrupt –
JONES:
Well, if I could finish – if I could finish –
KARVELAS:
He’s Prime Minister though, so you know, yeah, privacy is important, but, you know, part of the sort of deal, unfortunately once you take high office is that you are scrutinised differently.
JONES:
Yeah, no doubt about that. But the housing policy that we’re focused on is our Help to Buy Scheme which was blocked in the Senate, our Housing Australia Future Fund mechanism, which is going to be delivering on our commitment to build a million new homes, our rental assistance that we’ve already put in the scheme, our comprehensive policy to deal with housing and housing affordability, with more to come. That’s the housing policy that we’re focused on, and frankly, these are distractions to the real issue, and the real issue is how we build more homes and get more Australians into their first home and more Australians with a roof over their head.
KARVELAS:
Do you wish he’d waited till after the election? Do you wish he’d waited until after the election to do this?
JONES:
Patricia, I don’t know all the circumstances behind all of this.
KARVELAS:
I know lots of people who wish he had. You think it’s fine?
JONES:
Frankly it’s not my concern. My concern is delivering on our housing policy, getting the Greens and the Opposition to back the Help to Buy Scheme, which is currently blocked within the Senate. That’s the key public policy issue, not these other distractions. The key public policy is –
KARVELAS:
You call them ‘distractions’, but because we have a housing crisis and people can’t even buy their first house, let alone, you know, beautiful houses with ocean views, this is the optical problem for your government, because that’s – you’re not shifting the dial on people being able to access a primary home. So there is a level of anger in the community; fair or unfair, it’s how people feel, and so you have to respond to that, don’t you?
JONES:
The thing that we’ve got to respond to is the underlying policy problem where too many Australians can’t get into the housing market, which is why our policies around Help to Buy, which will help young Australians in particular get into the housing market, through our shared equity scheme, our work that we’re doing in the states and territories around removing all the obstacles to getting more houses built. This is the stuff that’s going to shift the dial, this is the stuff that’s going to make a difference to ordinary Australians getting a roof over their head and dealing with housing affordability.
These are the policy challenges, and frankly, the other stuff, however much it might grab a headline is not going to move the issue of housing affordability one iota. The policies that we’ve got at the moment will, and that’s why we’re pressing on the Greens and the Coalition to get out of the way and allow the government to implement its policies to help Australians get into the housing market.
KARVELAS:
Stephen Jones, thanks for joining us.
JONES:
Good to be with you.