Australia's Tax Office Stopped Taking Credit Cards. The Government Knew in July
The assistant treasurer now says ministers were told months before the public. The fix is a taxpayer-funded pause until mid-2027, and the fees still have to land somewhere.
Commentary · Humour Real news, with jokes. The facts are sourced below; the snark is ours.
Most people find out their bank has changed the rules when a payment bounces. Australian small businesses found out the tax office had changed the rules with a two-month grace period, timed for the busiest stretch of the tax year. On Sunday, the government admitted it had known the plan was coming since July.
Here are the facts. Assistant Treasurer Daniel Mulino told the ABC’s Insiders program that he and Treasurer Jim Chalmers became aware in July that the Australian Taxation Office was looking at options, and that its preference at that point was to stop accepting credit cards. The government’s guidance, he said, was for the ATO to keep negotiating with the card companies and to build in a transition period.
Those talks did not produce a deal. In late September the ATO decided to stop taking credit cards from December 1. Small businesses were told on September 30, a day before the public announcement. After a backlash, the prime minister and the treasurer stepped in: the government will now underwrite the card costs so the tax office keeps accepting credit cards until mid-2027.
Why the tax office wanted out
The trigger was the Reserve Bank of Australia’s decision to scrap card surcharges from October 1. The RBA says surcharges were costing consumers about $1.6 billion a year and that removing them is in the public interest. For most merchants, that means absorbing card fees. For the ATO, it meant an estimated $200 million cost that it said it could not carry without collecting less revenue.
Tax commissioner Rob Heferen said the office “would have preferred to continue accepting credit cards” but that the card companies did not offer a low enough rate. Mulino says the talks have since produced an improved offer and are continuing.
“We didn’t get into all of the details”
That is the line that will follow this story. Mulino denied the government had been hands-off, then described its approach as one where “we didn’t get into all of the details.” He also argued that taking credit cards indefinitely “would have very serious fiscal ramifications for the budget”, which is why a transition, rather than a permanent reversal, is still the plan.
Industry Minister Tim Ayres pointed out that businesses now pay lower costs because surcharges are banned. That is true at the till. It is less comforting for a café owner who used a credit card to smooth out a quarterly tax bill and now has a deadline instead of a payment method.
What it means for your wallet
If you run a business in Australia and pay the ATO by credit card, nothing changes until mid-2027 under the current plan. After that, expect a transition rather than an open-ended option, and keep an eye on whatever rate the ATO and the card networks agree. Nothing here is financial advice; it is a reminder to check how you pay before the rules move again.
The bigger lesson is about timing. A policy known in July became a public surprise in late September and a government-funded patch in October. Nobody had to invent a crisis. They just had to wait until it was urgent to explain it.