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ATO boss defends credit card ban in staff email as small businesses push back: 'Nail in the coffin'
Jim Chalmers’ fingerprints all over ATO debacle
ATO boss calls urgent meeting over credit card payment ban fury
Jim Chalmers has revealed he was the architect behind the tax office’s timeline on banning credit cards before a dramatic backflip to delay the policy, after Anthony Albanese called a snap meeting of cabinet ministers to intervene.
In the wake of escalating pressure from business leaders and MPs across the aisle, the Treasurer on Friday announced Labor would cover costs associated with its surcharge ban for the Australian Taxation Office to allow for the continued use of credit cards in payments to the agency until July next year. The Australian has been told the Prime Minister decided the government’s approach on the issue needed to change after conversations with business leaders and MPs, with the proposal to cover the ATO’s costs ticked off by the expenditure review committee on Friday morning.
In making the announcement, Dr Chalmers revealed he had initially greenlit the ATO’s two-month timeline on implementing the credit card ban. “Once we were aware that these changes were being proposed (by the ATO), we insisted on a transition period, which initially was from the beginning of October until the end of November,” he said.
“And today we are substantially extending that period so that the ATO has the opportunity and the time to consult more, particularly with small business, on their implementation of this ban.”
The intervention comes amid ongoing fallout from the government’s economy-wide surcharge ban, which the travel sector warns will increase costs by between 2 and 5 per cent and see some operators follow the ATO’s lead and ban credit cards all together. While confirming he had initially called for the two-month transition period, the Treasurer stressed the actual ATO decision to ban credit cards was made “independently” of government.
Pressed on why it had taken so long to intervene, Dr Chalmers said his announcement on Friday showed Labor had “taken feedback very seriously”.
“The ATO made this decision late in September not to accept credit card payments. Obviously, we were aware before then that they were grappling with this issue,” he said. “We’re always working to do the very best that we can, in the context of quite substantial constraints in the budget, to do the best that we can for people.”
Labor’s intervention came after the Coalition announced it would introduce legislation next week to force the ATO to accept credit card payments.
Despite the government’s backdown, the opposition said it would still be seeking legislative change to overturn the ban altogether rather than simply delay the inevitable.
“After a week of ministers defending the Albanese government’s assault on small business through the ATO credit card ban, and the Coalition announcing it would force a change if the government didn’t act, the Prime Minister has finally dragged the Treasurer into giving small business a stay of execution, but not a solution”, opposition Treasury spokesman Tim Wilson said.
“This is now the fifth time the Prime Minister has humiliated his Treasurer by forcing a backdown: first the application of his CGT hike on small business, second the widows tax, third the death tax, fourth the trusts tax, and now the ATO credit card ban.”
Labor’s intervention on Friday was welcomed by business leaders as “a reprieve” for operators that would be able to continue making tax payments with credit cards to manage cash flow until at least November. However, the move also fuelled criticism that the economy-wide surcharge ban was deeply flawed and unfair, given government expected small businesses to bear the additional costs it posed when the tax office could not.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar, who led the push against the surcharge ban, dismissed government claims that the policy would save consumers $1.6bn, calling the promise “smoke and mirrors”.
“It’s a false economy. Someone has to wear that cost. And what we’ve said … is we don’t want that to be added back in, lumped wholly onto a small business,” he said. “I don’t think it was something that was ever deliverable … if that’s the advice that (the government) were relying on, then I think it was poor advice and the analysis was wrong. We knew that this cost would be borne somewhere.”
The Council of Small Business Organisations Australia joined ACCI’s calls for the surcharge ban to be re-examined.
“If the cost of accepting credit card payments is significant enough for the ATO to reconsider its approach, the government must also recognise the costs being imposed on small businesses that accept those same payments from their customers,” COSBOA chair Matthew Addison said.
Dr Chalmers hit back at criticism over the surcharge ban, declaring the context was starkly different for the ATO than the broader business community. “It’s pretty obvious that the ATO doesn’t have the ability to set their own prices,” he said. “They’re implementing the tax system, so, it is a different proposition when it comes to the ATO implementing tax rates versus small businesses and others setting prices for their goods and services.”
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England wasn’t the only country to have a “window tax” – it was a significant social, cultural, and architectural force in England, France, and Ireland during the 18th and 19th centuries. People refused to disclose how much money they made, considering it an invasion of privacy – so you would be charged based on how many windows your house had. In retaliation, people bricked up their windows, which you can still see today.
DAYLIGHT ROBBERY documents the bricked up windows of London, originating from the Georgian-era Window Tax. The works examine the role that light and air play for our wellbeing in the spaces we inhabit, something more important than ever after the year we’ve all experienced.
Found via This isn’t Happiness.
