Chalmers steps in: ATO credit card ban delayed after business uproar

The Australian Taxation Office’s controversial banning of credit card payments will no longer come into effect at the end of next month, after the government negotiated with the independent agency to delay the change.

Treasurer Jim Chalmers will allocate additional funds to the agency to support a year-long transition period, after the ban – which was set to come into effect on November 30 – came under heavy criticism.

The announcement comes after fierce pushback from the business community, opposition parties and some members of the Labor backbench that saw the ATO’s decision as damaging to the cash-flow management of small businesses.

Appearing on morning television on Friday, Environment Minister Murray Watt said the ATO’s plan to ban credit car payments for tax bills so as not to burden all taxpayers with the associated costs was a completely “independent decision”.

“When they made clear that they intended to proceed with this, we insisted on them having a good transition plan with the business community and to consult with the business community about that,” Watt told Seven’s Sunrise .

“We expect them to do that consultation properly. I mean, I think we need to keep it in perspective that when it comes to payments to the ATO, it’s only a very small number of taxpayers who pay their tax payments by credit card, it’s about 5 per cent for small businesses and about 2 per cent for individuals.”

Following the October 1 introduction of bans on credit card surcharges, the tax office surprised small business owners in announcing a November 30 cut-off date for credit card payments.

The government produced mixed messaging on the topic on Thursday, when Housing Minister Clare O’Neil shared the government’s “real concerns” about the plan, countered by Assistant Minister Andrew Charlton who said the government supported the decision.

The government offered a more unified message on Friday, with Watt joined by Foreign Minister Penny Wong, who encouraged the tax office to perform meaningful consultation on the ban, while Defence Industry Minister Pat Conroy said the ATO should “do their job and talk to small businesses”.

Wong also reiterated the independence of the tax office, as deputy Liberal leader Jane Hume questioned “who is in charge”.

“You can change this with a stroke of a pen. You can change this with a decision. Small businesses are crying out for a change. They are asking for your help,” Hume told Sunrise , “You just have to have the will, and you can’t blame the ATO. They’re your agency. You’re the government. You should do this”.

Several Labor MPs speaking to this masthead on the condition of anonymity shared their concerns over the way the government’s relationship with small business was being framed, but stressed the ATO had blindsided the government but were difficult to wrangle because of their independence.

“It’s just alarming that were seeing this sort of behaviour from the ATO. It’s overreach, it’s hostile they need to remember who they serve.