Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

I thank senators for their contributions to this debate and the wide-ranging support that the bill has. In particular I extend the thanks of the Minister for Finance in that regard.

More and more consumers in Australia are using credit cards to pay for their purchases, whether online or in retail stores. There are many benefits to the use of cards for both consumers and businesses who accept payment by card. While both sides enjoy benefits, there are costs associated with card use, and it is important that these be fairly distributed.

If merchants use cost-recovery as a cover for squeezing higher profits from consumers who choose to pay by card, that is simply unfair and that is what we attempted to address through this legislation. Currently the only restrictions on merchants' surcharging come from the rules of card schemes. These usually allow the merchant to recover its reasonable cost of card acceptance. This includes, but is not limited to, the merchant service fee that the merchant pays to its financial institution.

Most merchants, it should be noted, act fairly by choosing either not to surcharge at all or to limit surcharging to the recovery of their genuine costs. However, this is not always the case. Excessive surcharges, at times up to 10 per cent or more, sometimes occur. This has generated substantial angst in the community. Misleading consumers on the true cost of payments erodes the efficiency of and confidence in our payment system. Today, this government is responding to the significant community concern about excessive surcharging, and I welcome the fact that the Senate looks like supporting those measures.

Under this new framework, excessive surcharging by merchants, where the cost added on is above the merchant's cost of accepting the payment, will be banned. This will not stop merchants from recovering their own costs of accepting cards. Fair and reasonable surcharges help to send a price signal to the community about the real cost of payments. Profiteering by merchants, however, under the guise of cost recovery will not be allowed. Given the large volume of card payments made—up to $45 billion each and every month—this measure will likely provide considerable savings to everyday Australians. To ensure that merchants react promptly to these changes, the Australian Competition and Consumer Commission, as the enforcement agency, will be given powers, including powers to issue infringement notices to merchants who continue to do the wrong thing by consumers. Penalties of up to $108,000 for each offence by listed companies will incentivise merchants to do the right thing—that is, to do the fair thing by consumers.

This demonstrates our government's commitment to addressing consumer concerns. The amendments contained in this bill will improve transparency for consumers and facilitate improved price signals about the real cost of payments. This, backed up by the Australian Competition and Consumer Commission being on the beat, should drastically reduce the chance that merchants will seek to surcharge excessively and profiteer from ordinary Australians.

On behalf of the government I thank all those who have had input into the development of these reforms. I note in particular the statement by Senator Dastyari that this is a good piece of legislation. I welcome that. I acknowledge the support of others and the input of many others into this legislation, which is an important consumer reform. In the committee stage, I am sure we will touch upon and I will respond to Senator Whish-Wilson's amendments. I commend the bill to the Senate.