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Tuesday, 2 February 2016
Page: 127

Mrs PRENTICE (Ryan) (20:20): In this rapidly evolving cashless society, we touch a button and, on an increasingly compact computer device, type in a creditor and an amount to pay them from anywhere in the world and, presto, payment is made. Multiple payments are made if that is what you want to do—and we have not even opened our purse or our wallet, let alone seen the money change hands. From the great Marco Polo's 13th century notes that began to replace gold and silver and then metamorphosed into plastic notes—with Australian ingenuity—to the key currency now presented to shops, tradies and other merchants, a single plastic card now represents the entire worth, and debts, of its holder.

Johannes Gutenberg's printing press, which bought about the mass printing of money, is almost obsolete, with modern-day bank accounts now combining with state-of-the-art online banking facilities. Almost everything we do or think about doing in modern Australia is supported by our financial system. Indeed, the financial system helps us manage our household budgets, holds our savings, provides the credit we might need and, through insurance, also helps us manage some of the risks we face.

Today's credit card symbolises the power of technology, innovation and resilience in commerce and trade. It allows us to pay for drinks or a meal with family and friends with a plastic card, and we can procure the week's groceries and fill our cars with fuel without coins or a handful of Australian made plastic notes. Each month around $45 billion of purchases are processed through more than half a billion card transactions. We can now pay school and university fees, as well as electricity, gas, water, rates, telephone and internet bills, from the comfort of our home or office. We can even get our online banking facilities to pay regular bills automatically without us having to personally handle the transaction at all.

This financial system allows us to buy a new home, pay the mortgage or rent, start a new business venture or even plan for retirement. It offers much promise to make our lives even easier—a faster, easier and more convenient way to manage our personal, household and business affairs. It has the capacity to improve lives and save time for every individual, family and business in Australia every day, every week, every month and every year.

But it also comes at a cost—often hidden and cumulative. The purpose of the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 is to amend the Competition and Consumer Act to establish a legislative and regulatory framework to ban excessive card surcharging and establish the Australian Competition and Consumer Commission as the primary enforcement agency for the ban. To get to this point today, the government held a root and branch examination of Australia's financial system just as we promised to do during the last federal election. This is a very good example of where our government has not simply looked at a problem or sent it to a committee for another review, but instead has used this to inform the legislative and administrative action we are now taking.

The inquiry, which was chaired by Mr David Murray AO, was tasked with making recommendations that would position the financial system to best meet Australia's evolving needs and support economic growth. I welcome this bill as another step forward in protecting the rights and interests of the Australian consumer so as to encourage our financial system to deliver better and more affordable services.

If consumers are overcharged or treated unfairly the losses they incur adversely affect the whole community.

Sadly, many Australians have almost been conditioned to expect to pay increasingly high bank fees—especially those passed on by merchants—because that is what we have always done, year on year. It was an understandable expectation that began when the process and administration of a sale at a local shop was more labour intensive and used technology that came at great expense. The more money you made or spent using a credit card, the more money you paid in transaction fees. But today's transaction fees should better reflect today's banking and finance sector costs. In times of old, we watched our money more carefully as it passed from our wallets to others' hands, and more rigorously scrutinised the cost of services and charges because we could see it, feel it and count it. While many merchants do pass on costs fairly, some intentionally charge many times more than the true cost of accepting a credit card payment.

Out of sight should not mean out of mind. That is why the coalition promised to establish a Financial System Inquiry, and it is why we are making important changes to safeguard the interests of every Australian resident and business. There is no doubt that our financial system needs to be as competitive and affordable as possible, but the economies of scale that accumulate from multiple transactions should help drive down prices, not simply serve as a proxy tax or levy. It is important to recognise that the Murray inquiry found that Australia has a well performing financial system and our government's response will ensure it is the best in the world.

But that does not mean it should be out of reach. The government has listened to the community's concerns and we have taken action. I congratulate the assistant minister for bringing forward this bill and I stand with those in this House who recognise the importance of this sector to drive the Australian economy as well as how it impacts on everyone in a very pervasive way, many times a day. I share the concerns about the abusive practice of excessive surcharge that have been expressed by many people who live and work in my electorate of Ryan. Indeed, of the 6,500 submissions received by the Financial System Inquiry, more than 5,000 related to the opportunistic practice engaged in by some merchants to drive profits through card acceptances.

Given the widespread problem of excessive surcharging, the coalition government is moving to outlaw the rapacious behaviour of a select number of merchants who choose to take advantage of Australian card users. Where a merchant charges a customer a card surcharge they should only recover their real costs. On this issue, the government stands firmly behind Australian consumers. We believe consumers are entitled to a fair deal which limits surcharging to genuine cost recovery. That is why the government is taking action to ensure customers are charged no more than the amount that reflects the true amount of the merchant's costs in accepting that payment. A surcharge will be deemed excessive where it exceeds the costs that merchants are charged by their payment provider for using that payment method.

However, with technological innovation bringing new types of payment methods into the market, maintaining flexibility in the application of this regulatory regime is vital. That is why we will put in place a flexible framework that government and regulators can adjust to changing circumstances. While this bill will provide considerable savings to Australian consumers, the government will not stop merchants from recovering their own costs of accepting cards. However, profiteering by merchants under the guise of cost recovery will not be allowed by this government.

The Australian Competition and Consumer Commission, the ACCC, will be the primary enforcement for banning of excessive surcharging of customers for using a particular payment method. Our financial system is the great enabler for economic growth and a great facilitator for growing business, commerce and trade. Indeed, in an increasingly cashless world, a competitive, innovative and efficient financial system supports the operation of the whole economy. While consumers are always responsible for the consequences of their financial decisions, they should always be treated fairly. The financial services and products they purchase should perform in the way they are led to expect.

I congratulate the assistant minister and the coalition government for listening to the issues, concerns and aspirations of Australian consumers and businesses as well as the concerns of academics and other stakeholders in the banking and finance sector, both here in Australia and overseas. As I said previously, this is a very good example of where the government has not simply acknowledged a problem—or sent it to a committee for another review—but has used it to inform the legislative and administrative solution we are now implementing. I also note that most stakeholders generally approve of the framework outlined in the bill for the ban of excessive surcharging. I commend the bill to the House.