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Tuesday, 2 February 2016
Page: 130


Dr JENSEN (Tangney) (20:31): This Competition and Consumer Amendment (Payment Surcharges) Bill 2015 shows that the Turnbull government is a government of not just good intentions but actions. It is unfortunate for Australia that Labor had six years to strengthen our economy but did nothing. In their six years of governance Labor managed to preside over Australia's fastest deterioration of our debt position in modern history. The Australian economy and the Australian people suffered. The effect of Labor's mess is still being felt.

This government is still cleaning up Labor's disastrous mess. We have implemented $3 billion worth of budget repair measures from a total of $4 billion. The Turnbull government is making sensible policy positions, taking Australia's economy from investment in mining to a diverse, innovative and people-driven economy. We are growing confidence, strengthening job growth and improving business conditions. We are removing barriers to ensure policy is agile, nimble and innovative. We are strengthening our nation's finances to secure jobs and growth by opening up trade, boosting innovation and building more infrastructure.

This government will modernise the way we deliver products and services while strengthening the budget. On Sunday, 7 December 2014 the Financial Systems Inquiry's final report was released. This report made evidently clear the pressing issue of Australian consumers being subject to excessive card surcharges. The Financial Systems Inquiry was commissioned to examine how Australia's current financial system could improve in order to meet changing needs as well as examine how best to support and sustain Australia's economic growth.

It is important that Australia's consumers and the Australian economy are afforded an efficient, competitive, prudent and flexible financial system. The report made it blindingly clear that the Australian community holds significant concern regarding card surcharges. The Financial Systems Inquiry received 6,500 submissions, with more than 5,000 related to excessive card surcharges. This government has carefully assessed the Australian community's concerns. We are now delivering our commitment to implement fairer outcomes for Australian consumers.

Whilst I must note that not all are participating in this behaviour, it is certain that Australian consumers have been taken advantage of by particular merchants. The choice that some have made, to abuse this process, is unacceptable. Steps must be taken by this government to ensure an end to this unfair practice. It is essential that the Turnbull government take the necessary steps to protect Australian consumers and ensure the efficiency of the Australian economy. It is also essential that the Australian community have faith in the very system that is essential in the daily functioning of the Australian economy.

It is a fact that Australian consumers pay an exorbitant amount of money in card surcharges every year. At times, surcharges charged by some merchants are far in excess of what could reasonably be considered the costs to merchant. How can this be justified and why are Australian consumers being forced to pay for it? This bill will provide much-needed savings to Australian consumers. Put plainly, Australian consumers should not be paying more than the reasonable cost of the transaction. Importantly, the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 will ban the excessive card surcharging above the merchant's costs. The surcharge will be excessive where it exceeds the amount that the merchant is charged by their payment provided for using that payment method.

The definition of an excessive surcharge has been carefully constructed. This is to ensure that payments are captured if they are purporting to substantially be in the form of a surcharge. This means that when a merchant charges a customer with a card surcharge, for the obvious and unquestionable purpose of covering their costs of accepting the card, they will be subject to the card surcharges set by the Reserve Bank of Australia. The merchant will then be fined should they charge above this amount without legislative cause. No, this does not mean that merchants will be prevented from recovering the costs of processing or accepting cards—rather, it is a resolution that protects a merchant's right to recover their costs of processing.

This resolution also accurately informs the community of the costs of competing forms of payment facilities. It will give a clear picture of how much a merchant is actually charged to the Australian community. Overwhelmingly, this bill focuses on protecting consumers and businesses from being charged unreasonable card surcharges. It is this government's response to the financial systems inquiry that will provide Australian consumers and the Australian economy with necessary protection. This bill is the Turnbull government's response to ensure that Australian consumers are fairly treated. This response will ensure that there is a legislative and regulatory process to ban certain surcharges that exceed the cost of the service to the merchant. However, this bill is ultimately about the Turnbull government taking responsibility to ensure that Australian consumers are protected and delivering on a promise to make Australia an even more nimble and agile cashless economy.

The future is about technology, innovation and change. The Australian consumer gets it, and so, too, does this government, which is why we are putting in place these necessary common-sense protections. Liberals love lowering tariffs and ripping away unnecessary economic barriers. Australian business and productivity will be boosted by this government's ability to remove economic barriers from Australia. The Industry Skills Fund is just one example of this government's commitment to the Australian community to support the transition to the new high-wage, high-value-add economy. Via this fund the government has provided my electorate with skills to be able to compete and be agile in Australia's new economy. We are building a skilled workforce ready for the new technological and structural economic challenges facing our economy. We are making commitments and taking action to prepare Australia to be in the best possible position for the future.

Labor had six years in government to remove economic barriers and to address the issue of excessive card surcharges. In fact, the only credit card issue that Labor concerned itself with was the hard-earned wages of the Health Services Union being illegally wasted away by Craig Thomson; $300,000 was stolen and wasted on the HSU credit card. They were not concerned about the exorbitant amount of money that Australian consumers were spending in unnecessary fees. Nor were they concerned about delivering deficits totalling $191 billion, or leaving a projected $123 billion for this government to clean up. Labor came close to breaking the ACCC with underfunding, which led to unnecessary and inexplicable losses.

This government has sensibly ensured that the Australian economy recovers from Labor's $47 billion deficit. We are also ensuring that Australia is best equipped for a future of change, making sure above all that Australians are secure within an agile and nimble economy. We believe in the training, facilitating and supporting of Australians into an economy that they can take the most out of. We are cleaning up the financial mess left over from the financially disinterested Labor Party. This payment surcharges bill will apply to excessive surcharges which are covered by the Reserve Bank of Australia's Payments System Board standards or the regulations. The Reserve Bank will set the boundaries for the scheme and set the permitted surcharges for most payment types. It is important to also note that the regulations have the ability to determine these matters should that become necessary in the future. The ACCC will be the primary enforcement agency for the ban and will be afforded appropriate enforcement powers under this bill to ensure that the ban is adhered to by all. The ACCC will have the power to require that merchants provide information to explain the cost of their surcharge and to ensure that the merchants comply with such requests. The ACCC will be afforded the power to issue infringement notices to those not adhering to the ban on excess surcharges. This ensures that the ACCC can take action on smaller infringements, providing for timely resolutions, rather than seeking resolutions through the court systems, which can be costly and time consuming.

The infringement notice amount affordable to listed corporations who have breached the ban is 600 penalty units, amounting presently to $108,000. An infringement notice amount for bodies corporate not listed as corporations is 60 penalty units, amounting presently to $10,800. The ACCC also has the power to issue an infringement notice amount of 12 penalty units, presently at $2,160, for persons other than bodies corporate. This extensive list of infringements will ensure efficiency when dealing with breaches of the legislation; $45 billion of purchases are processed through over half a billion card transactions each month is Australia. This figure is staggering and shows the need to ensure that Australian consumers are appropriately protected from card surcharges. It is an important protection for an important daily need for Australian consumers.

This bill has provided a flexible framework throughout which government and regulators can adjust and provide for future changing circumstances. This is particularly important with the development of new technology and payment methods. It is important that this bill be ready for the changes of the future to ensure continuing consumer protection. It is the aim of this bill that Australian consumers be protected from unnecessary and arbitrary card surcharges. Australian consumers must be afforded a fair go. This bill will ensure that surcharging will be limited to genuine cost recovery and will end the practice of some merchants profiting in the name of cost recovery

Australian consumers understand the need of merchants to recover the true costs of a transaction. What Australian consumers do not understand and do not condone is helplessly having the wool pulled over their eyes. Australian consumers do not deserve to pay excessive surcharges for transactions which they work hard to be able to make. This bill will result in the improvement of Australia's payment system by providing efficiency and fairer outcomes for both consumers and business. It will also implement significant and targeted behavioural change throughout Australia. This is necessary to ensure that Australian consumers are given a fair go. It is the Australian way to ensure fair deals for all Australians, and this government is taking action.

US President John F Kennedy stated:

Consumers by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision.

It is essential, then, that we afford Australian consumers the necessary protections from excessive and unnecessary card surcharges. These tough laws deliver on the Turnbull government's commitment to protecting Australian consumers from excessive card surcharges. This government has worked extremely hard to ensure Australian consumers are given a fair go and to ensure the health and prosperity of the Australian economy. Consumer confidence in the Australian economy is on the rise. Our government is reacting sensibly to ensure the growth of our transitioning economy. We have improved the bottom line over the relevant forward estimates period by $90 billion. It is because of this government's actions that payments are expected to grow at an annual average rate of 1.8 per cent compared to an inherited 2.6 per cent under Labor. The Turnbull government is committed to any economic decisions that are necessary to ensure the growth of our economy and the growth of Australian jobs. This bill is only a small part of this effort but it is an important step in ensuring the protection of Australian consumers.