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Thursday, 3 December 2015
Page: 14686

Financial Services

Mrs SUDMALIS (Gilmore) (14:11): My question is to the Prime Minister. Will the Prime Minister update the House on how the government is protecting the consumer by dealing with excessive credit card surcharging?

Mr TURNBULL (WentworthPrime Minister) (14:11): I thank the honourable member for her question. The government's response to the Financial System Inquiry included an important commitment to protect Australian consumers from excessive credit card surcharging. We have listened to the community, and we are going to stamp out behaviour which seeks to take advantage of Australian consumers. Every month, about $45 billion of purchases are processed through credit card or debit card transactions. It has become the standard means of transacting commerce and, of course, it is the standard means of transacting most e-commerce.

Of the 6,500 submissions to the Murray inquiry, 5,000 related to the issue of credit card surcharges. Clearly, contained within the claim for a surcharge for a credit card is an implicit representation that the merchant is recovering the cost imposed on the merchant by means of processing the credit card. These credit card surcharges have, in many cases, been significantly higher than the actual cost. The government's commitment is to ban merchants from engaging in excessive surcharging. Merchants will instead be expected to act on a cost recovery basis, so a surcharge will be deemed to be excessive when it is higher than the amount that the merchant is charged by their payment provider. We will protect consumers and we will empower the ACCC to enforce this ban on surcharging, and it will be able to impose substantial penalties of up to $108,000. The government have clearly held consultations, but these are technical changes. We will work with all the relevant agencies, including the Reserve Bank, to implement them from 1 July next year.

Consumers are entitled to a fair deal. They should get exactly what the merchant is representing. If the merchant—whether it is an airline, a hotel or a store—says credit card surcharge, so much, then that should be no more than the merchant needs to recover to recover the costs of processing the card. If the merchant wants to charge more for their goods or for their service, of course they are perfectly entitled to do that. This is an example of the government seeking to ensure that our economy works transparently and efficiently and that consumers are given a fair deal. It is all about our commitment to ensuring that we have strong growth, good jobs and future prosperity based on competition and productivity right across the board, right down to the retail level.