Senate debates

Monday, 22 February 2016


Competition and Consumer Amendment (Payment Surcharges) Bill 2015; In Committee

10:50 am

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

I will attempt to deal with the overall issues that are raised in relation to the amendments that Senator Whish-Wilson is proposing, to put the remarks on the record and in context. Then we can deal with any other specific issues if need be.

It is important to note a little bit of background. In 2009 the Reserve Bank of Australia led reforms to ensure there was transparency in ATM fees. Prior to those reforms there was no transparency around ATM fees. It is important to distinguish what ATM fees are as distinct from the practice we have seen in relation to merchant fees that have been passed on. The fee for ATM use is a fee for service. Before someone withdraws money from an ATM they have the choice to pay the fee for that service or find an alternative ATM that does not charge a fee. There are a range of different services at different fee levels, including free services, depending on your financial institution, that are available to customers in the ATM market. Genuine competition exists there. Estimates are that the RBA reforms have led to savings of around $270 million from ATM fees between 2009 and 2011. It is notable that the use of ATMs is gradually declining with the greater take-up of electronic payments and the cash-out facilities in stores.

The credit card surcharge legislation that is before us today is implementing the important work undertaken by David Murray as part of the Financial System Inquiry. The FSI did not make any recommendations in respect of ATM fees. The government's surcharging ban targets misleading conduct by merchants who charge a fee under the guise of passing on a credit card payment they incur to accept a card. That is an important point to emphasise. We are targeting misleading payments where consumers face a fee, allegedly associated with conducting a purchase by credit card, that is not a genuine, real or accurate reflection of the cost of that fee.

Conversely, ATM fees are disclosed in advance and are fees charged for a specific service, namely, the use of that ATM. They are not presented as the cost of somebody else in that regard, unlike misleading conduct in relation to merchant fees. They are different issues. The measures contained in this bill are the result of extensive work and broad consultation, and they really tie back to the Financial System Inquiry, which did not, as I indicated, touch on the relationship with ATM fees.


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