ROS CHILDS:
Let’s stay with the government’s proposal to ban debit card surcharges from 2026. The Assistant federal Treasurer, Stephen Jones, joins us now. Stephen Jones, welcome.
STEPHEN JONES:
Good to be with you.
CHILDS:
So, how much do surcharges cost consumers and small businesses right now?
JONES:
Look, the charging arrangements are incredibly opaque, but our estimates are anywhere between $1.5 and $4 billion a year is being taken out of the system by a combination of the banks, the card system providers, and the payment rail providers. The end result is that consumers are paying to access their own money, and they’re saying, quite rightly, it’s harder to get cash, fewer places are accepting it, we’re being forced into electronic payment systems and we’re being forced to pay surcharges to access our own money.
CHILDS:
So, the banks, though, say that fees and charges have been reducing every year for the past decade. That there is an option for businesses to use what’s called Least Cost Routing so payment terminals automatically default to the cheapest surcharge. What’s your response to that argument?
JONES:
What we want to see is that customers aren’t paying to access their own money to buy a cup of coffee or to fill their shopping trolley, and that’s what’s happening at the moment. We want to ensure that at least, at the very least, on these debit charges, this surcharging is knocked on the head.
What’s occurred over the last year or so is we’ve seen a whole heap of changes going on in the way these charges are imposed upon the small businesses. Big differentials between what a big retailer like a Coles and Woolies is paying, compared to a small business when it comes to these surcharges – the payments they’re making to their banks. Not a lot of clarity about what’s being paid, where and by whom, except when it comes to the consumer. So, we’ve got the Reserve Bank spending the next few months having a look at it – a detailed analysis of the cost of providing these services and the charges that are being charged by all the participants in the system – there’s at least 3 or 4 different participants in the system – as a precursor to us getting some clear guidelines, making it very, very clear to industry that we will introduce a ban by the beginning of 2026 on debit charges, on debit card surcharges.
They don’t have to wait till then. They can move ahead of that. But we want to ensure that we do it in a way that doesn’t look like a benefit to consumers, but it ends up being the small businesses who cop it in the neck—they’re prevented from covering the costs of a surcharge by recouping it from a consumer, but they’re still getting the banks and the payment system providers charging these exorbitant costs. That’s why we need to take a little bit of time to get it right, but sending a very clear message to all the participants, this has got to stop.
CHILDS:
Ok, so you say you’re sending a signal, a message with this proposal, but how hopeful, realistically, are you that the banks will move on this without you having to take action, even though in the past they have proved very resistant, haven’t they, to making changes that will hit their bottom line?
JONES:
What I can say I’m certain about is that if the banks, the payment system providers, the card operators don’t get it right and don’t knock this on the head themselves, then we are willing to move ourselves and using the levers available to us to ensure that these debit card surcharges are ended.
CHILDS:
So, we heard a couple of political voices there, the Greens Senator, Sarah Hanson‑Young, and the Opposition Leader, Peter Dutton, both saying that the cost‑of‑living crisis means that consumers can’t wait until 2026, the start date for the proposed ban, they need the surcharge ban now. Also, Sarah Hanson‑Young calling for the ban to be extended to credit card surcharges, as well as to debit cards. How would you answer that?
JONES:
To Peter Dutton – 9 years, nothing? Not a single thing on this problem? It was a problem on his watch. He’s done nothing on it. In the first 2 years of our government, we’ve moved across a whole range of areas of consumer policy, lifting protections on consumers. We’re determined to do it. So, the bloke who has done nothing for 9 years, now thinks there’s an urgent problem to be fixed, doesn’t have a lot of credibility, particularly when he’s voted against every single piece of cost‑of‑living relief that this government has introduced. Peter Dutton is batting on zero when it comes to helping consumers. And, for the Greens, frankly, their form on this is whatever Labor does and then another 10 per cent. So, frankly, this is just situation normal from the Greens. We’re taking a considered approach. We’ll get a benefit to consumers, but without making small businesses pay for it. We’ll do it in the right way. Very clear message to industry: they’ve got to get their act into order.
CHILDS:
Assistant Treasurer Stephen Jones. Thank you.