Julie-Ann Campbell (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I think it's fair to say that, when most people hear the words 'payments system modernisation', their eyes might glaze over. They might not be particularly excited. They might lean back in their chair and get ready for a snooze. They might put in their earphones and settle in to watch something on a streaming service—but not me. I am excited by payment systems because, while they might not seem sexy, they are something that we use every single day.

If you are writing out a cheque to someone special on their big birthday, if you are going to the corner store and swiping your debit card to buy milk when you are on your way home, if you are tapping your digital wallet at the supermarket when you're off to buy nappies, if you are paying cash when you are at the petrol station—each and every one of those things is a payments system. It's not something that we think about very often, but we use payment systems more than we do anything else that we will talk about today in this House. We use them to buy things every single day. But the technology is changing, and we have to change with it. To make sure that we protect consumers when it comes to payment systems, we have to make sure that the RBA can regulate them, and that is what this bill is all about.

While the Treasury Laws Amendment (Payments System Modernisation) Bill 2025 might not be the subject of intense water-cooler discussion in offices across the country, it is a very important piece of legislation. At its core, what it addresses is the risks that new and emerging technologies pose to the way we pay for goods and services. In 2025 you do that more often than not with just a tap of your phone. Updating the payments system regulatory framework is necessary to ensure Australia has a fit-for-purpose, modern and efficient payments system. This is crucial because the smooth operation of the economy rests upon it. You use the payments system when you dash to the servo to buy that milk late at night, you use it to transfer money to your mate at a restaurant after a shared dinner, and it's used to put your wages into your account. Every single day we use a payments system. None of us probably think very much about it when we're tapping our phones to buy our Pepsi Max, but it is the foundation of our financial system.

The payments system supports the stability of the financial system by minimising risks associated with transactions and by facilitating the flow of payments. A well-functioning payments systems bolsters the development of the financial sector through inspiring consumer and business confidence in their transactions. It also links Australians to the global marketplace. We know that consumers, everyday people in the community and in our society, need to have that confidence if they're going to put their hard earned money across the table to buy goods and services. Ensuring that our payments systems are up to date with technology and are well regulated is what drives that confidence for consumers. The components of the payments system are the nuts and bolts of our financial system. That's why it needs to be safe, that's why it needs to be trusted and that's why it needs to be accessible. And that is what this bill delivers.

The sector is a rapidly evolving sector, and, as a result of the digital revolution, teenagers today make purchases instantly and seamlessly with their watches or their phones. They've never had to learn how to write a cheque, and the only cash they see is in birthday cards from their grandparents. We now have a payment system that is large and complex, one that is continually adjusting to new technologies and processes. As the transactions become easier and more convenient for consumers, there are opportunities for growth and also increased risk. Where there is increased risk, we need to make sure that people in our community are protected, without stifling growth that will be critical to our economy.

There is also the need to balance this with maintaining the more traditional methods of payment, to meet the needs of consumers who rely on those systems. Those consumers are often some of the most vulnerable in our community. That's why, as we expand the regulatory framework for payment systems, we need to make sure that those consumers who use more traditional forms of payments are still protected, particularly older Australians. The New Payments Platform, NPP, underpins the modern payment system, enabling fast and secure transactions. Services such as PayID and PayTo have changed the way consumers and businesses interact. As of mid-2023, nearly 13 million PayIDs had been created, over 25 per cent of account-to-account transactions were being processed via the NPP, and more than 100 payment providers were offering NPP services to approximately 90 million consumer accounts. We are hugely reliant on the robustness and security of this digital infrastructure, and we must take into account the necessity of safeguarding against outages, against technological failures and against cyberattacks.

This bill is part of Labor's commitment to the Strategic Plan for Australia's Payment System, which was released in June 2023. The strategy lists five priorities for the government. The first is promoting a safe and resilient payment system. This involves reducing the prevalence of scams and fraudulent activity, strengthening cybersecurity measures to guard against attacks and maintaining robust oversight of systematically important payment infrastructures. When it comes to scams, everyone in this chamber knows someone who has been hit by a scam, whether it be digital or online. Making sure that we as a government prioritise protecting those vulnerable people who are the target of scams is an important part of what we do. The secondary focus is on ensuring the payments regulatory framework keeps pace with technological and market developments. That is what we're talking about particularly in this bill today. Key initiatives include establishing a comprehensive licensing framework for payment services providers and promoting competition through transparent access to payment systems.

Thirdly, there is a need to modernise the payments infrastructure by implementing the phased removal of cheques, the enhancement of existing systems and the continued provision of access to cash, to ensure that no community is left behind. This purpose is designed to make sure that, whether you like to tap your phone as you get on the bus, you like to put cash in a card to your grandchild on their birthday or you like to use a debit card, it doesn't matter; you will be protected, you can have confidence in that payment system, and you will have a regulated system that works for everyone.

The next priority area is in uplifting competition, productivity and innovation across the economy. We've recently seen that the Treasurer hosted a roundtable focused on productivity. With our laser focus on ensuring that productivity increases and that we have reform in the productivity space, this is another layer to that work. This means aligning the payment system with broader economic and digital transformation goals. These include the Consumer Data Right framework, supporting wider adoption of digital ID and investing in digital and technological skills development.

Finally, the government aims to establish Australia itself as a leader in the global payments landscape, by creating a regulatory environment that encourages innovation and investment. This includes facilitating seamless cross-border payments and exploring the policy rationale for introducing a central bank digital currency. This background is useful to explain the broader work the Albanese Labor government is undertaking in this area, and this bill is an important part of that work.

The Treasury Laws Amendment (Payments System Modernisation) Bill 2025 provides expanded definitions for 'payments system' and for 'participant' so that the Reserve Bank of Australia can regulate new and emerging payments systems and participants. These include digital wallet providers and buy-now pay-later service providers.

As part of the risk management protocols, the legislation will also enable the Treasurer to designate payment services or platforms that present risks of national significance. This isn't just about protecting everyday consumers, this isn't just about protecting people in our community and families in our community, this is also about protecting our country from risks of national significance. These designations will give appropriate regulators additional oversight powers. This is a sensible and responsible approach from the forward-looking Labor government.

Under the new legislation, the Treasurer will only be able to give general directions. The Treasurer will not be able to direct the regulator on how to exercise functions or how to enforce regulations. This ensures the ongoing independence of the regulator in assessing and exercising their regulatory powers. These measures are key steps outlined in A strategic plan for Australia's payments system. They also directly respond to recommendations in the payments systems review that the RBA should be better-positioned to regulate new and emerging payments systems that are part of the changing and growing payments ecosystem.

The recommendations also state that there should be a greater role for the government, through the Treasurer, in setting the strategic direction of the payments ecosystem in collaboration with regulators and industry. That is what this bill does.

As I mentioned, one of the drivers of these reforms is for Australia's regulatory framework to facilitate competition and innovation while upholding financial stability and decreasing risk. To achieve this, the Albanese Labor government embarked on a comprehensive consultation process with stakeholders regarding this bill. Consultation partners included industry participants, government agencies and regulators prior to the release of the strategic plan. The Treasury also received 30 submissions from banks, payment-service providers and industry associations. Further stakeholder meetings were held with organisations such as the Australian Banking Association, the National Retail Association, PayPal, Google and the Commonwealth Bank of Australia to work through feedback on the text of the new definitions and the scope of the new powers proposed for the Treasurer.

The measures outlined in this bill are necessary to ensure that the RBA can not only regulate new and emerging payment providers but also combat risks to our national interest by expanding these powers to designated regulators. The measures support the government's key principles for the payment system: it is to be trustworthy, accessible, innovative and efficient. At their heart, what these laws are about is keeping up with the times. Because payment systems are something that we might not think about every day, but they are something that we use every day. Making sure that, as technology advances, we continue to protect consumers, to protect the national interest, to protect families who go about their day not thinking about payment systems but using them is incredibly important, because we don't want people to be scammed, we don't want new technologies to remain unregulated and we don't want families not to have the confidence to be able to pay for their groceries, their fuel and their health care every single day. They also speak to Labor's determination to provide a safe and secure payment environment for all Australians.

Tim Wilson (Goldstein, Liberal Party, Shadow Minister for Small Business) Share this | Link to this | Hansard source

We all know the experience these days—going into a shop, whatever it is, and buying coffee—you're looking very healthy these days, Deputy Speaker Georganas, perhaps you're not buying the muffin! Nonetheless, you're going in with your phone, credit card, debit card, whatever it is and hearing the sound—beep!—and knowing the transaction has just gone through. That is the modern payment system that so many of us engage with on a day-to-day basis, as most of us barely even carry cash anymore. Cash, as much as it is an important part of our economic security and the liquidity of our system, isn't actually how most of us engage. Most of us use digital transactions for the little things because it's become part of our day-to-day routine. As a consequence of the COVID pandemic a few years ago and as a result of the integration of EFTPOS many years ago and the expansion of credit cards and other forms of payment systems, it's very much now fully integrated into our lives.

Of course, the laws were designed at a time when payment systems were relatively straightforward. We all welcome this updated legislation to address the modernisation of our payment systems. It reflects a technical capacity to reflect how we use the payment systems today and to give government appropriate legislative coverage, particularly with the emergence of multinational payment systems with things like Apple Pay, Google Pay and Afterpay and for crypto and block chain systems as well. No-one is disputing that there's a need for it to be done in a way that is consistent with Australian law and Australian regulation by the appropriate oversight powers to the Reserve Bank of Australia and to be done with the need to make sure that it's done so that it integrates successfully with Australia's payment system so that we can build out a stable financial environment with confidence.

That doesn't mean the government has got everything right in this legislation. We know that the government is, in one sense, overreaching and, in another sense, not doing enough. It's overreaching because it's seeking to extend the RBA's powers into areas that perhaps go well beyond what it should be covering—going beyond components of payment systems and looking at certain types of fintech and even certain types of block chain technologies and digital wallets—where it doesn't necessarily have the appropriate skills or capacity to do so and could limit the capacity for financial innovation.

That has actually been one of the great growth areas of Australian innovation in recent years. Financial technology has put Australian small businesses at the fore, has put us in a position to grow and be successful and has often gone on to be sold internationally if not just domestically. We don't want to stifle that innovation and have regulators come down with the heavy hand of government and limit their potential for growth. We want to back them, we want to encourage them, and we want the operating environment to be open so that, where innovation can occur, it is an Australian first wherever possible. Of course, they need to be steered and guided, but that is to make sure that the system is as open as possible rather than it being too burdensome with regulation.

In addition to that, it's extended the powers of the Treasurer in a way that is increasingly by a form of regulation. There's always a balance between how much you give powers to the Treasurer by regulation—or any minister, I might add because I know there are a couple of them sitting at the table—versus how much you give power to the Treasurer through forms of legislation which force things to come back to this chamber, to the assent of the representatives elected by the people of this Commonwealth. Of course, by and large, we should always seek to do things through this parliamentary process—it adds proper scrutiny, accountability and deliberation—and also because we want to get to a position where, when a rule is imposed, it's uniform and goes through proper processes so that there's a broader degree of acceptance and understanding about the consequences of it, because, once the law is imposed, the consequences are often hard to undo. This government has become completely addicted to its powers by regulation to bypass this parliament. Only in the motion prior to this debate we talked about the government's new truth tax where it's trying to shut down or limit access to information by the public and scrutiny of this government by putting financial as well as scrutiny barriers over government deliberations. We've had in other pieces of legislation what they call a Henry VIII tax proposal, which after legislation has passed gives powers to the Treasurer to dictate the terms of tax rates, but really it's a lawless tax. That's what it actually is. It is a tax that is introduced that has no legislative coverage and oversight.

This legislation has its own similar problems. When you're giving very large powers to the Treasurer to decide things like payment systems, we have mechanisms within legislation to create disallowance motions where the parliament, if it disagrees with the decision the Treasurer makes, can come in and challenge the decision of the Treasurer, simply to say these matters should be brought back before this parliament and the status quo should prevail. This exists in lots of pieces of legislation. It's an entirely reasonable proposition, and I would have thought that, when you're giving the Treasurer this volume of power, that is an appropriate place for a disallowance motion to deal with the extent that power is being given to the Treasurer in these laws. That would build a much greater sense of confidence in this legislation. It disappoints me that the government has been arrogantly dismissing the potential for a disallowance motion in this legislation, because it would improve their legislation, it would build confidence and it would be better for tempering the enthusiasms of the Treasurer in his ambition not just to be Treasurer but to do things that are going to be good for the Australian economy rather than for his own political ambition, trajectory or whatever term we're going to use these days.

At the end of the day so many Australian businesses and small businesses are dependent on payment systems today. We all deal with it. I started my speech by referring to that little sound that we know when we tap our phone, credit card or debit card. You hear that little beep when you buy a coffee at your local cafe, and so many of them are using a terminal from a bank or another platform like Tyro or Square. Those terminals are the digital embodiment of small businesses then engaging with the entire global economy. That's the basis on which they then have the capacity to manage their supply chain, their payment systems and often then their tax, and the back-end systems and operations that empower small business to be successful are so critical. It's every single one of those transactions played out that enable the revenue, liquidity and cash flow for a small business to succeed.

This stuff really matters. We currently have record small business insolvencies. It's one of those things which the government doesn't like to talk about in question time. We have record small business insolvencies right now because they have cash-flow problems, and they have cash-flow problems because the dead hand of the Australian Taxation Office is coming after them to take away their revenue and what little cash they have or because of the rising cost of inflation. The government haven't been able to control inflation, because they keep stimulating the economy to cover up the fact that there isn't private sector job growth. Whatever it is, this government is failing in the economy. The dead hand is increasing the costs on small business to the point that they are closing. When you think about that, that means a kid doesn't get their first job in their community. They don't get their first foot on the ladder of economic opportunity. They then aren't in a position to step up and get their next job, potentially for a larger business, while they go on and study or go on, of course, into full-time work. The consequences of this government's policy are real. If we get the payment systems wrong, the impact on cash flow is also real. That's the sort of thing that the Reserve Bank is looking at right now in its consultation around payment systems reform. They're looking at the balance of who is going to pay for the different components of the payment system. At the moment, their consultation paper has put out the idea that they're going to ban transaction fees because they think that's going to be the best policy outcome. A robust number of people are coming through this building making different cases about what should happen. I just had somebody come to my office and argue that there should be compelled least-cost routings forced through to the provider as well as other limitations on how the system should operate. Nobody wants to pay merchant fees and transaction fees, and they want somebody else to pay. At the same time, we need a robust payment system because it's integral to cash flow. It's very important around keeping prices low.

But we also need a system with integrity, because sitting behind that is one of the most important exposures we have around cybersecurity and risk. If we don't get that right, we expose our entire economy to components of risk. This is one of the things that the prudential regulator, APRA, and ASIC and the banks regularly stress test, because they're mindful of the exposure they have and what it can go on to do for financial stability. As the previous speaker spoke about correctly before, it's also one of the biggest pathways of exposure to things like scams. We all know people who, even with the best of intent, have found themselves exposed to scams, partly through the payment system. The payment system isn't just one of the pathways where people get exposed to scams; it can also be one of the best ways to protect Australians against scams. Banks and other financial institutions with the resources can invest in stopping that. We have to get this right.

In addition to that, we need to work with the platforms, the providers and small businesses. This was a topic that was discussed recently between myself and the Minister for Small Business in a speech we recently gave up in the mural hall about the launch of a report about digital payments, sponsored by Square but hosted by COSBOA, the small business advocacy body. The Minister for Small Business, who I have very fond affection for—she's a lovely lady amongst many things—made a very important point in her speech, being that, for this government, small business is part of their consideration and part of their decision-making. I remarked in my speech that that is a very good thing to have, but it also is a reflection that this government see small business as something to be considered.

In my speech I said, in a coalition government, small business will be at the fore of decision-making. We fundamentally believe that this nation is best governed from the citizen, the family, the community and the small business up, not from big government, big unions and big corporates down. That is the clear cleave between the Labor government and a coalition government. We believe in a nation governed from citizens, families, communities and small business up, and that is why, like with citizens, families, communities and small business, we make decisions with them at the core of our focus, not the best interests of big unions, big governments and big corporates, as the Labor Party does. That's going to be the basis on which we make decisions about things like the payment system—how we strengthen it, make sure it's got integrity and make sure it backs and enables small business to succeed and thrive? How do we position it so that it's part of the success of small business in being able to get money paid on time? If there's any exposure for small business, it is that they do not get paid on time, unlike large companies or those who do simple things like drive transactions, like with a payment system, because cash flow is king. Have you heard that expression, Deputy Speaker Georganas? I'm looking for a nod; give us a nod.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

It's not for the speaker to ask the Speaker a question.

Tim Wilson (Goldstein, Liberal Party, Shadow Minister for Small Business) Share this | Link to this | Hansard source

Give us a nod, Member for Hughes. There you go! It just shows you that these days members of the Labor Party can't even give you a nod at 'cash flow is king'. That shows how much they don't understand small business.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

Order! I ask the member to withdraw that because the implication is on the Speaker, on the chair.

Tim Wilson (Goldstein, Liberal Party, Shadow Minister for Small Business) Share this | Link to this | Hansard source

I withdraw. There is no implication. The member for Hughes, the member I previously regarded, couldn't even acknowledge that cash flow is king, and that shows you that the modern Labor Party doesn't understand that cash flow is king and that they don't understand small business. (Time expired)

David Moncrieff (Hughes, Australian Labor Party) Share this | Link to this | Hansard source

():  Payments are something that Australians are engaging with in everyday life, sometimes dozens of times a week. These days, that looks like tapping cards for groceries, paying bills online, splitting meals through apps and subscribing to services that debit our account each month. These payment methods were unthinkable decades ago. For younger Australians, buy-now pay-later platforms are a part of everyday life.

For many small businesses, digital wallets are now as common as cash registers once were. I remember when, about 10 years ago, I was working at Woolworths Jannali on the cash register and there was a bunch of young teenagers that came through. One of them wanted to pay with cash, and all of his friends were teasing him because he was paying with cash. They asked, 'Haven't you heard of a card?' It was just ridiculous that these young people would be paying with cash. Even at that time I thought that was fairly reasonable; I still used cash. But, for young people now, it's such a different economy to what we used to have.

The way that money moves in our economy has changed dramatically, but the laws that underpin these movements have not kept pace. The Payment System (Regulation) Act dates back to 1998. At the time it was written, smartphones did not exist, digital wallets were unheard of, cryptocurrencies were decades away and even contactless cards were still in the future. This act served us well for its time, but it is now out of step with reality. That lack of synchronicity creates risk for consumers, for small businesses and for the economy as a whole. This bill, the Treasury Laws Amendment (Payments System Modernisation) Bill 2025, tackles those risks. It brings the law into line with how Australians live, trade and pay in 2025.

There are three pillars to this bill. The first thing that this bill does is update definitions. The current definition of 'payment system' is too narrow. It only focuses on the circulation of money in a funds transfer system, and that leaves major gaps. It does not clearly capture digital wallets, closed-loop systems like American Express or the growing number of services that facilitate payments in new ways. This bill replaces that outdated definition with a modern, technology-neutral one. It ensures that a system falls within the regulatory net whichever way it makes payments possible—whether through traditional currency, stablecoins or other digital units of value.

The bill also updates the definition of 'participant'. Right now, the law is limited to formal members of a designated system, but many entities play a critical role without being formal members. Think of things like Apple Pay, Google Wallet or buy-now pay-later providers. The new definition captures the full value chain of entities that facilitate or enable payment.

This is not about regulating retailers or everyday merchants who sell goods and services. It's about ensuring that those who operate or enable payment systems are accountable under the law. Why does this matter? It matters because, today, your payment might involve five or six different actors before it reaches its final destination. Without clear definitions, regulators cannot capture the whole chain, which creates blind spots. Those blind spots are where risks accumulate—risks like unfair fees, misuse of consumer data or instability in new digital assets. By updating definitions, this bill ensures that new technologies are captured from the outset, rather than after problems arise. It makes our framework resilient, not reactive.

The second thing that this bill does is strengthen accountability and flexibility. Under the old act, only the Reserve Bank could designate a payment system and only on public interest grounds. That was a narrow test. It did not allow action on issues that fall outside financial stability or competition. The payments system review recommended giving government a broader role, and this bill does exactly that. It gives the minister the power to designate a payment system if, and only if, it's in the national interest. That is important because payments issues today are not confined to financial stability. They touch on cybersecurity, data integrity, consumer protection and even national security. For example, the spread of digital wallets raises privacy questions, and the rise of foreign backed stablecoins can create sovereignty questions. In such cases, it is appropriate for government to be able to act directly, not just rely on the Reserve Bank's limited remit.

The bill also allows the minister to nominate specialist regulators. Depending on the circumstances, ASIC, APRA, the ACCC or AUSTRAC might be the right regulator to act. That ensures flexibility, speed and expertise. This is an important change. It recognises that payments are no longer just financial plumbing issues; they cut across competition law, prudential stability, consumer rights and anti-money-laundering frameworks. By nominating the right regulator for the right issue, government avoids duplication and ensures effective oversight. As someone who used to work for the prudential regulator, I can wholeheartedly put my faith in the professionalism of our prudential and financial regulatory landscape. This bill also requires the minister to consult with the Reserve Bank and other regulators before exercising these powers, and ministerial directions must be system-wide, not targeted at individual companies. That balance protects regulatory independence while allowing timely government intervention when the national interest is at stake.

The third thing that this bill does is it modernises enforcement and penalties. A regulatory framework is only as strong as its enforcement tools. The current penalty regime in the act is outdated. Maximum penalties are too low. The only enforcement route is through criminal proceedings, which are heavy handed and slow. This bill creates a civil penalty framework alongside criminal offences. That gives regulators a more flexible set of tools—civil penalties for routine breaches; criminal penalties for the most serious misconduct. It also allows enforceable undertakings so regulators can secure binding commitments from participants without resorting to court every time. And it raises maximum penalties to reflect the seriousness of noncompliance. A company that ignores a regulator's direction should face meaningful consequences. For context, under the old regime, failure to comply with a direction attracted 50 penalty units. Under this bill, the maximum penalty doubles to 100 units per day of noncompliance—500 units for corporations. That sends a clear signal that regulators mean what they say and that compliance is not optional. Civil penalties also bring it into line with other areas of financial regulation, such as corporate law and consumer protection. They reduce reliance on criminal prosecutions, which are costly and time consuming, and instead allow proportionate responses to breaches.

For consumers, this is about trust. Whether you are paying through a debit card, a buy-now pay-later app or a digital wallet, you should know the system is regulated, fair and safe. You should not have to worry that gaps in the law leave you unprotected.

For small businesses, this is about confidence. Many small shops rely heavily on digital payments. They deserve clarity and consistency in the rules and assurance that competition will be protected. The updated framework also ensures that small businesses benefit from clear access regimes, meaning they are not unfairly blocked from participating in major payments systems. For the broader economy, this is about resilience. Payments are the plumbing of commerce. If they fail, or if trust in them is undermined, the economy suffers. By updating the framework, we reduce risks before they turn to crises.

Some have asked whether this bill imposes new costs on business. The answer is that compliance costs are minimal. The bill is estimated to have nil financial impact on the budget and minimal compliance costs. It largely brings existing practices into the formal regulatory framework. What it delivers in return—certainty, consistency and trust—is well worth it. This bill also reflects international best practice. Other advanced economies are modernising their payments systems laws. We cannot afford to fall behind. If Australia wants to remain a leader in safe, efficient and innovative payments, our laws must keep pace. This bill also builds in safeguards. Ministerial powers are not unchecked. Before designating a system in the national interest, the minister must consult with the Reserve Bank and relevant regulators. Ministerial directions to regulators cannot single out individual participants. They must be systemwide and consistent with the regulators' independence. These are important protections. They strike the right balance between giving government the tools it needs and maintaining regulatory independence.

The payments system may seem invisible to most people. It works quietly in the background. But that is precisely why it must be robust. When it fails, the impact is immediate. When it is misused, the harm is wideranging. By passing this bill, we are future-proofing Australia's payments framework. We are ensuring that it is technology-neutral, flexible and strong enough to meet emerging risks.

There's one final point I want to emphasise. This is not about slowing innovation; it's about creating confidence for innovation to thrive. When consumers know their rights are protected, they are more likely to embrace new technologies. When businesses know the rules are clear, they are more likely to invest. By modernising the regulatory framework, we encourage safe innovation; we do not stifle it. Australians expect this parliament to act before problems arise, not after. This is what this bill does. It responds to the finding of the payments system review. It closes gaps in our regulatory framework, and it strengthens consumer protection. It supports competition and innovation. It secures the resilience of a system that every Australian depends upon. I commend this bill to the House.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

We have heard from the member for Goldstein, the shadow minister for small business outline the coalition's position on this particular bill, the Treasury Laws Amendment (Payments System Modernisation) Bill 2025. We have before us amendments put forward by the shadow assistant treasurer, the member for Cowper, which I encourage the House to adopt. We just heard a very animated speech by the new member for Hughes, and I applaud his enthusiasm. A person who obviously has studied economics and finance at university, the Wollongong university, he talked about payments and 'the plumbing of commerce'. It's a good line—a very, very good line. As somebody who has run a small business, I know that is very true. I know he got very worked up about the speech, which he and/or his staff have taken quite a bit of time to prepare. But, if you're out listening to parliament today or if you're viewing proceedings, you would be questioning, particularly if you had your superannuation tied up with First Guardian and Shield Master, why this place is not spending time questioning that. Whilst I appreciate that this treasury laws amendment bill is important and whilst I understand full well that, for small business, it has time constraints and limitations and is an important piece of legislation and law, the real finances that this place should be discussing today and isn't have to do with the collapse of this particular superannuation company.

The coalition does support this particular bill's objectives, but we do have concern over the lack of parliamentary oversight over the Reserve Bank and the Treasurer's decisions, particularly this treasurer, the member for Rankin. We're not the only ones. The former RBA governor Philip Lowe has also expressed those views very much lately. I know that the RBA needs its independence. I get that. It's Australia's central bank. Obviously, it's got a very important role, which it's had since 1960, when it took over various functions from the Commonwealth Bank. But, if anyone who had superannuation tied up with that particular company I mentioned—$1.2 billion has gone from that company; it has ruined lives—is listening in to this parliamentary broadcast, they must be wondering why we are getting so worked up over legislation which, whilst it's important, is perfunctory legislation. It is going to go through whether or not our amendments are adopted and accepted. I know the member for Hughes was very excited by it all, but tell that to the likes of Adelaide couple Garry and Michelle Thomas. They've had a $240,000 nest egg tied up, and it's vanished overnight. These people are financially ruined. They are going to have to work every day for the rest of their lives to even make up some of the shortfall. I say 'some' because it will be only some.

The Australian Securities and Investments Commission is investigating what its deputy chair, Sarah Court, described as misconduct on an industrial scale. There are now 40 people working on finding out about the 12,000 Australians who are victims of this. Forty people—it's too little, too late. We should have better oversight of these sorts of things. Evidence of misconduct was mounting long before investors saw their balances drop to zero, and the government has every right to feel as though it lacked complete oversight of this. When I say 'every right', it probably should be 'every wrong'. It's facing backlash for sitting on a Senate report into ASIC's failures for more than a year, with the watchdog being criticised for failing to stop the collapse before it happened. Here we are, in the House of Representatives, whilst this collapse is taking place and 40 people are working feverishly to find out where the money has gone, why the money has gone and how the money went, and these poor people are left high and dry. We are spending an inordinate amount of time—and I am, too—talking about the treasury laws amendment, about whether, quite frankly, it covers pay-and-go and tap-and-go and all these sorts of things. We should be thinking about our priorities just a little, because it's absolutely no comfort for those people sent to financial ruin by the criminal collapse of this particular fund, this particular superannuation situation.

I heard the shadow minister for small business talking about small business in his contribution and how it related to this particular amendment bill before us. It's interesting to look at some of these statistics on small businesses. In 2025, bankruptcies in Australia increased from 1,309 companies in June to 1,362 companies in July. Bankruptcies in Australia averaged 679.61 companies from 1999 until 2025, reaching an all-time high of 1,448 companies in March 2025 and a record low of 192 companies in January 2021. I ask a couple of questions: who was in government in March 2025? That would be Labor. Who was in government in January 2021? That would be the Liberal-National coalition. It's no surprise, it's no coincidence and it's no great shock that Labor is not the government for small business. The definition of a small business can be varied, but, if I were really sarcastic, I'd say a small business these days is what would have been a medium or large business when we were in government, because Labor has this unique way of turning medium and large businesses into small businesses.

In Australia, a significant number of new small businesses close within their first few years, and that's just the way small business operates. It is tough being a small business operator. I know; I've run one. I've been in a partnership with two others running a media and publishing company in Wagga Wagga. It's tough work because, often, you are taking home less pay than the workers you employ. It's a great reward to employ someone—it really, truly is—because you're giving somebody the hope and opportunity to have a better life, improve themselves and develop their skills, but it is really tough work to keep the doors of a small business open. The rate of failure of a small business—a proven statistic—is around 20 to 30 per cent closing in their first year, increasing to about half or more within three years. However, these figures can also be interpreted by entry and exit rates. For example, the Australian Bureau of Statistics reported that 362,893 businesses exited in 2023-24. That was a 14 per cent exit rate, proving my point about how very tough it is.

I do question—as part of this bill, which is obviously related to small business—why the government has chosen not to renew the employment, the commission, of Bruce Billson. I believe Bruce Billson was the best small-business minister this country has had, and I say that being a former small-business minister myself.

Matt Keogh (Burt, Australian Labor Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

Very gracious!

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

It is very gracious, thank you, Minister for Veterans' Affairs!

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The best by a long way, you're saying?

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The best by a long way—now I'm getting disparaged by the deputy speaker! But it is true. There were some who called Mr Billson 'the best small small-business minister', very unkindly, about his stature. He also had the portfolio responsibilities for competition, policy and consumer affairs. If I thought the member for Hughes was animated, Mr Billson was totally animated in everything he did. But he's been the Australian Small Business and Family Enterprise Ombudsman for some time, and his contract is not being renewed. I really would ask the government to reconsider that, because he is so enthusiastic about what he does and he's so good at his job. Those sorts of jobs should be above politics. Whilst I appreciate that Labor has made some appointments on bipartisan lines, the contract of Mr Billson should have been extended because of the experience, the enthusiasm, the success and the delivery that he has brought to that position. He is very, very good—Kate Carnell, a former Liberal chief minister here in the ACT, was also very good in that role—and I very much appreciate his advice, particularly when it comes to industrial relations. ASBFEO is a great website for anybody venturing into the difficult world of small business, because the advice that it provides in the very complicated world of IR has been very well received by companies, particularly small businesses.

We heard in question time today from the Minister for Small Business how small business is indeed the backbone of the economy—and it is. We should never forget that. I heard the minister—I listened to her closely—talking about the instant asset write-off. It's a shame that it has been limited under this government. I know that, when I was the small-business minister, the rate of tax being paid by small business dropped to its lowest level since the days pre World War II, and I was very proud of that fact. We should, every single one of us, be doing everything we can, and then some, to support, protect and help the small businesses in our electorates, because you don't know how valuable they are until you lose them.

A little bit on this particular bill, the Treasury Laws Amendment (Payments System Modernisation) Bill 2025—the law was written a quarter of a century ago, when, obviously, cheques, EFTPOS, Visa and Mastercard were the only ways Australians paid. It's a very different society these days. The law doesn't cover the systems that Australians use today—Apple Pay, Google Pay and Afterpay or even crypto and blockchain systems.

I talked about the superannuation fund collapse before, but I would say, too, that I think the other thing that small business would like us to talk about is making sure that we restrict the payment that has to go with using tap-and-go. If that were to be addressed by this government, I think there'd be a lot of cheering not only from small businesses but, indeed, from customers. I know the rate varies, but I'll tell you what doesn't vary or only goes up: the banks' profit margins. They are just milking customers dry when it comes to benefiting from tap-and-go. It is a lot of money. It mightn't seem so much when you buy your morning coffee, but it adds up. It does add up. I commend what the former member for Cowper Luke Hartsuyker did in that regard.

I commend the current member for Cowper for the amendment that he's brought forward to this particular legislation. I recommend the House wisely consider and adopt what he has put forward—as he enters the chamber—to improve this particular bill.

Mary Aldred (Monash, Liberal Party) Share this | Link to this | Hansard source

It's a privilege to follow the member for Riverina. I associate myself with his remarks about Mr Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman. That is an incredibly important role. It's a statutory role. It has responsibilities for mediation, where small businesses find themselves in a David-and-Goliath situation. Anyone who knows Bruce Billson knows he is an absolute evangelist for small business. He has lived it and breathed it over many, many years, and I too want to pay tribute to his record of service, not just as a former small-business minister in this place but in his time as the Small Business and Family Enterprise Ombudsman. I wish him and his wife, Kate, all the very best for their next steps.

This is an important opportunity to talk about small business in Australia because, right now, small-business owners have never worked harder for less or faced more risk and red tape. I'm a passionate believer that strong businesses sustain strong communities. I see that every single day of the week in my electorate of Monash, where small-business owners are the first to put their hands up to sponsor the local footy team or sporting organisation. It's small businesses that are the first to put their hands up to volunteer at a service club, with a Lions barbecue or with Rotary. We very much rely on those organisations in regional Australia. So I pay tribute to the mum-and-dad small business owners. Every morning they get out of bed, they put their house on the line to give someone else a shot at a job, and they're doing it tough right now. The input costs across so many areas are going up and up. The risks of being in business are going up and up. Having grown up in my parents' family-run small business, I would see them answer phone calls from customers on a Sunday night and work late into the night on BAS statements. I know so many small businesses across this country are doing it tough with lean margins. They will pay their staff before they get paid. They will make sure that their customers are delivered for. They will always put themselves last; they put their community first. They look after their staff, and they are the unsung heroes of this country.

I want to talk specifically about the conversation at the moment on the RBA's review into merchant card surcharging, because this is a conversation that's been going on for a number of years now. It is one that, when I was CEO of a national small business organisation a few years ago, I remember engaging in a discussion on, because it's an important issue for many small business owners. The technology that's developed across that time—the scale, pace and acceleration of new technology that's come in since there were cheques and old-style merchant facilities—has changed rapidly. So, as a parliament setting regulatory systems and legislative changes, we need to make sure that we're keeping up with best practice and that we're having regard for cyber security concerns. We've seen many of those in recent years at a consumer level, where there's been sensitive health and financial data breached. We need to make sure that the RBA are not left alone to deal with those challenges, given their very narrow remit. So the government has announced that it will ban debit card surcharges, and that's subject to further work by the RBA.

I want to have consideration in my remarks for, most of all, small businesses and consumers, because right now the cost of living is going up and up. I get emails every week from constituents that have said, 'My energy bill has gone up yet again.' Everybody is doing it really tough right now. We need to make sure consumers and small businesses are not wearing the cost impost of large organisations, especially large multinational organisations which are perhaps skimming the cream on support and subsidies that are meant to provide for those in a less profitable situation. I will be raising a couple of key measures which I believe the government and the RBA should be adopting in making sure these considerations are best regarded, and that includes enforcing a separation of debit from credit card merchant service fees. This includes no blending of debit and credit. If you've got a credit card where you're earning Qantas points and a whole range of other benefits, that should be treated differently to, say, an EFTPOS card, which is a bare basic. It's your money that you're using to pay for a can of Coke or a meal at the pub, and that should be dealt with separately. I'd like to see the mandating of dynamic least-cost routing on debit card transactions. I'm also putting forward that a delay in the implementation of any proposed surcharge ban for 12 months is a sensible thing to do to allow time for small-to-medium businesses to switch providers, revise their contracts and look for better options.

I think a number of companies have been established in recent years, and some of those include Square and Stripe. These are big tech companies that are paired with big tech providers like Apple and Google, and they're the ones profiting in these situations. The assistance is not being carried through to SMEs and consumers. I think also reducing debit interchange close to zero, which has been recommended by the Productivity Commission, is something else that needs to be proceeded with.

While the RBA is still reviewing this matter, I would also countenance that its proposal does not go far enough in properly addressing a number of factors which are live issues at the moment: insufficient reduction in costs for card users and businesses; the increased costs to users of cash; ensuring banks don't pass on forward costs incurred overseas to Australian card presence fees; failing to ensure debit card providers are not subsidising the reward schemes, as I referenced earlier, of credit card users; not mandating to require payment providers to process all transactions using the least cost route; unnecessarily high profit margins on small business transactions compared to big business transactions, which is also something that we need to have regard for; and the steady increase of merchant card fees are all things we need to take into account.

The coalition's position on this bill is that we support the objectives but have serious concern about the lack of parliamentary oversight over the Reserve Bank and the Treasurer's decisions in this area. Having said that, if our amendments fail, the coalition will not oppose the bill. Quite broadly, the law that regulates our payment systems is the Payment Systems (Regulation) Act 1988. It is a number of decades since it was initiated into law. The technology and systems used since that time have dramatically scaled up. About 25 years ago cheques, EFTPOS, Visa and Mastercard were the only ways Australians paid. That's changed now. We have Apple Pay, Google Pay, Afterpay, crypto and blockchain systems. We also need to have regard that, when regulators are given sweeping powers over fast-moving competitive industries, parliament must have the ability to review those decisions.

Those decisions have a significant impact on regional Australia, which is where my first concerns always lie and are founded in. If I think of the Monash electorate and the Gippsland region, of which I'm a part, we're very proud to grow, make and manufacture things. About 23 per cent of Australia's milk output comes from our region. About 26 per cent of Victoria's beef comes from our region. We're very proud of the clean green horticulture produce we make, which is sought the world over. But there is an ecosystem of small to medium businesses that rely on all of those producers and all of those links in our region to get their products to market quickly and efficiently and to provide for consumers. Small businesses in my region have a number of other challenges they're contending with at the moment. Even though we have the best soil in Australia and are normally in a bit of a rain cloud, we are suffering a green drought at the moment, so I'm speaking on a weekly basis with farmers who are forced to sell off stock early. That is going to be affecting their liabilities in their tax bill with the ATO.

As I mentioned in my inaugural speech, I'm a passionate believer—as the Prime Minister once said many moons ago, when he was infrastructure minister—that infrastructure is a primary enabler of productivity, so roads and routes to market in my electorate to get products safely and efficiently to their destination are something I'm particularly passionate about. Around 40 per cent of my region is towns under a thousand people. Some of the small towns are tourist towns where there is a vibrant small business network. They're timber towns too, although thanks to the Victorian Labor government those timber towns and timber jobs are becoming fewer and fewer. They're very important too. If it's towns like Noojee, Neerim South, Walhalla, Erica, Rawson and Loch, I will always do my utmost to make sure their concerns and their challenges are best represented.

I'm proud to have worked in the timber industry, which is a great enabler and supporter of a broader system of small businesses. I previously served on the board of Australian Sustainable Hardwoods in Heyfield, and I acknowledge Ian Jones, the chief financial officer there, who, after many decades, will be retiring in October this year. That timber mill makes sure that it's economic for the IGA truck coming into town with groceries to return to Melbourne with a trailer full of timber. They support the timber museum and the Heyfield Lions Club. They do so much for that community, and that's demonstrative of why that quantum of heavy industry is important in regions like ours to support small businesses.

I've always very strongly believed that a strong economy is the best way to support the most vulnerable people in our community, to protect our environment and to invest in education, because without a strong economy we can't achieve any of those things. Small business is a key part of that. About 44 per cent of Australian jobs are in a small business, and that's why there are considerations such as those contained in this bill. It's incredibly important that we always look after Australian small-business owners as we work our way through these legislative processes.

Daniel Mulino (Fraser, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

Firstly, I'd like to thank all those members who have contributed to this debate. The government won't be supporting the amendment moved by the member for Cowper. The updates introduced by this bill are a key part of the government's plans to ensure the regulatory architecture underpinning Australia's payments system is up to date and fit for purpose. The broadened definitions of 'payment system' and 'participant' will ensure that, despite the increasing size and complexity of Australia's payments system, the vast array of new service platforms can be regulated effectively by the Reserve Bank of Australia. Further, the ministerial designation powers will give the Treasurer capacity to ensure that payment services or platforms that present risks of national significance can be subject to additional oversight, if necessary. These changes deliver on the government's commitment under the strategic plan for Australia's payments system to update the payments regulatory framework to help underpin its vision for a modern, world-class and efficient payments system that is safe, trusted and accessible and enables greater competition, innovation and productivity across the economy. I commend the bill to the House.

Milton Dick (Speaker) Share this | Link to this | Hansard source

The question is that the amendment moved by the honourable member for Cowper be agreed to.