Assistant Treasurer Daniel Mulino has revealed that the Australian government was aware of the Australian Taxation Office's (ATO) plans to ban credit card payments as early as July 2026, months before the decision was publicly announced in late September. The ATO's initial decision to stop accepting credit card payments from December 2026 sparked significant backlash from the business community, prompting Prime Minister Anthony Albanese and Treasurer Jim Chalmers to intervene and extend the acceptance of credit cards until mid-2027.
Mr. Mulino acknowledged that the government was informed of the ATO's intentions in July but emphasized that the preference was to avoid an abrupt ban. He stated that the government advised the ATO to continue negotiations with credit card companies and to implement a transition period. The ATO's decision followed the Reserve Bank of Australia's move to scrap card surcharges from October 1, 2026, which the RBA claimed would save consumers about $1.6 billion annually.
The Australian Financial Review reported that the ATO had privately informed the government about its credit card ban plans and presented various options. The ATO defended its decision, citing the $200 million annual cost of processing credit card payments, which it argued would reduce revenue collection and funding for government services. Taxation commissioner Rob Heferen noted that credit card companies did not offer a low enough rate for the ATO to continue accepting payments.
The debacle has also highlighted tensions between the treasurer and prime minister. Mr. Albanese intervened after receiving a text from Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar, leading to a quick government response. Mr. Chalmers denied being 'rolled' by the prime minister, while Industry Minister Tim Ayres dismissed any underlying frustrations, describing the government as 'a cabinet-style government that's working very well.'