Assistant Treasurer Daniel Mulino has acknowledged that the government knew as early as July that the Australian Taxation Office was considering a ban on credit card payments—months before the plan was made public.
Appearing on ABC Insiders with host David Speers on Sunday, Mulino said he and Treasurer Jim Chalmers were informed in July that the ATO’s preferred option was to stop accepting credit cards if it could not negotiate lower processing fees with card companies.
His comments followed an Australian Financial Review report that the ATO had privately briefed the government on its plans and outlined several options before announcing in late September that credit card payments would no longer be accepted from December 1.
The proposed ban sparked a strong backlash from business groups. Prime Minister Anthony Albanese and Treasurer Jim Chalmers subsequently intervened, agreeing to cover the costs so the ATO could keep accepting credit card payments until June 30, 2027.
Mulino said the government became involved after the Reserve Bank of Australia announced broad reforms to eliminate card payment surcharges—changes the central bank estimated would save consumers about $1.6 billion each year.
“If we go back to a really important decision, this is a reform of our payment system that is long overdue,” Mulino said.
“The RBA made the recommendation that we should get rid of surcharges, but also they recommended a holistic reform of the system where we also capped interchange fees.”
He said the government began discussions with relevant agencies after the RBA announced the reforms and expected them to adapt to the surcharge ban.
Assistant Treasurer Daniel Mulino admitted the government knew about the ATO’s credit card concerns in July
The planned ban prompted a fierce response from business groups, leading Prime Minister Anthony Albanese and Treasurer Jim Chalmers to fund continued credit card acceptance until mid-2027
“In July, the government became aware that the ATO was looking at options and that at that point their preference was to not accept credit cards,” he said.
“And we made it very clear that we wanted them to continue to engage with credit card companies to seek the best possible deal for the taxpayer.”
The ATO initially stood by its position, saying it could not sustainably absorb the cost of credit card transactions, which was estimated at about $200 million a year.
Tax Commissioner Rob Heferen said the agency would have preferred to keep accepting credit cards but had been unable to secure sufficiently low rates from payment providers.
During the interview, Speers repeatedly questioned Mulino about whether the government had effectively endorsed the ATO’s plan to phase out credit card payments.
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Mulino maintained that the decision was ultimately the responsibility of the independent tax office.
“The ATO made a decision and in making that decision, we engaged with them and indicated that they should engage with the credit card companies to get the best possible deal,” he said.
However, he conceded that funding the continued acceptance of credit card payments indefinitely would carry significant consequences for the federal budget.
David Speers questioned Mulino about why the government did not intervene until October
Jacinta Price accused the government of failing to consult businesses about the changes
‘Accepting credit card payments going on indefinitely would have very serious fiscal ramifications for the budget, and that’s why we always said that there should be a transition period,’ Mulino said.
Speers challenged the minister on why the government did not intervene sooner if it knew in July where the ATO was heading.
Mulino defended the delay, arguing ministers wanted to respect the independence of the ATO and the Reserve Bank and allow negotiations with credit card companies to continue.
‘We stepped in very quickly once the feedback came to us,’ he said.
‘I’ve listened to stakeholder feedback, as has the PM and the Treasurer, so obviously we’ve changed tack and we’ve listened to feedback.’
The government’s intervention came after widespread concern from small businesses, tax professionals and taxpayers, who argued removing credit card payments would create major compliance headaches and cash-flow pressures.
Shadow Small Business Minister Jacinta Nampijinpa Price seized on the government’s reversal, accusing Labor of failing to properly consult small businesses before backing the ATO’s original plan.
‘Labor’s lack of consultation is absolutely evident in the ATO’s backflip, delaying these changes until 30 June 2027,’ she told Parliament on Monday.
‘This capitulation raises the obvious question: why wasn’t industry properly consulted before these changes were announced?’
‘The Labor government seems to have made a real habit of announcing first, listening second and backflipping third,’ she said.
