CANBERRA, ACT, Oct. 9 -- The Treasurer of Australia issued the following transcript:
Jim Chalmers:
There are 2 sets of announcements that we are making today, the first one is about card surcharges. We've stepped in to ensure that the tax office can take credit card payments until the end of June next year. This will give them the time to consult more with small business and to get it right. This recognises the really important contribution that small businesses make to our local communities and to our economy more broadly. So, we've stepped in here to provide the necessary funding to ensure that the ATO can continue to take credit card payments until the end of the financial year.
We take very seriously the feedback that the ATO and the government have received when it comes to implementing this surcharge ban. Now, we try not to interfere with the RBA or the ATO when they go about designing and implementing this surcharge ban, but it is really important that we have stepped in today to make it possible for the ATO to continue to take credit card payments until the end of the financial year. So, that's the first announcement.
The second announcement is about the disaster funding. We will retain the existing 75-25 arrangements when it comes to responding to natural disasters. This is all about ensuring that the Commonwealth government is providing certainty and providing funding when disaster hits. We do take seriously all of the consultation that has happened between the government, with local councils and with other organisations to make sure that we get this right. I want to thank the councils that have engaged with us. I want to thank all the organisations that have been part of this consultation and I pay tribute to Minister Kristy McBain, who has done a heap of this work.
Our goal here is to make sure that disaster funding can be faster, that it can be adequate and that we get the funding where it is needed as quickly as possible. I also want to shout out Team Queensland in the federal parliament. The federal Labor colleagues have been working very hard behind the scenes for this outcome that we are announcing today. We've got outstanding colleagues in the federal Labor caucus from Queensland. Every one of them has been working very hard to make sure that we get this right. I pay tribute in particular to our colleagues in the far north, Matt Smith and Nita Green who will be available for media a little bit later on. But really, right across Team Queensland, in the federal Labor parliamentary party, we have been working through these issues, consulting in a meaningful, in a genuine way, to make sure that we get the right landing point.
There are a series of reforms here that Minister McBain will continue to work through, but we want to make it really clear that we have decided to retain the up to 75-25 funding split as it exists right now. We are doing that to provide certainty to councils and others, and communities, in advance of disaster season here in Queensland, so that people know what the lay of the land is when it comes to disaster funding.
Australians are there for each other when disasters hit and the government will be there for them as well. The federal Labor government is making sure with this announcement that we will be there for communities and for councils when disasters hit. I pay tribute to Minister McBain and all the Queensland colleagues who have been working through to get these outcomes.
We are going to hear from Assistant Minister Chisholm and then we'll take some questions.
Anthony Chisholm:
Thanks, Jim. Real pleasure to be here this morning and obviously wanted to talk about this announcement in regards to disaster funding. As Assistant Minister in the Albanese government, I spend a lot of my time in regional areas talking to mayors and councils. Unfortunately, some of those trips have been on the back of natural disasters that we've seen have an impact on communities. It brings out the best in mayors and councils and also the Queensland community, but we know that Queenslanders suffer from this more than most. So, I'm really pleased with this announcement today to ensure that those communities can go into disaster season knowing that the Albanese government has their back.
We have a proud record in terms of working with mayors and councils since our time in government to ensure that we can help these communities recover as quickly as possible. I'm really pleased that that work will continue and that mayors and councillors can have confidence as we go into the disaster season that federal government support will continue to be there.
I wanted to thank my Queensland colleagues, in particular Team Queensland. We've been working hard on this. We've got great relationships with mayors and councils and communities throughout the state and I'm really pleased that that is going to continue and that we're going to be there and support those communities. Whilst we hope we're not impacted, we know in Queensland this year that there is a risk for that to happen again and the federal government will be there, have your back and support these communities as we need to rebuild as well. So, thanks, Treasurer, for being here.
Chalmers:
Before I take a couple of questions, can I just say I've known Anthony most of my life and for the whole time we've been working together, he's taken very seriously the immense contribution made by regional Queensland and also engaged very enthusiastically with mayors and local councils right around Australia, right around Queensland but particularly to the west of here and to the north of here, so I acknowledge the work that he's done as well.
The final point that we would make is this: this is a government that has invested a lot of time and effort and money in improving the disaster management, disaster response arrangements in this country. We funded the emergency management agency. We funded the stockpile, aerial firefighting, the alert system. So, we've shown across the board and for some time now a willingness to get these arrangements right. We know how harsh the Australian conditions can be. Australians are there for each other. The Albanese Labor government will be there for them as well.
Journalist:
Treasurer, what do you say to families who have lost hundreds of thousands of dollars from their wealth from the property downturn since the federal Budget?
Chalmers:
Well, there are a whole range of factors playing out in the housing market, and that's why we saw prices start to come off well before the budget in reaction to interest rate decisions and broader economic conditions as well. Now, in this country over the last couple of decades, we've had extraordinary price growth, but it hasn't been that unusual to have periods where prices have come off. On at least 7 occasions over the last couple of decades, we've seen prices come off.
Even currently, if you look at the most recent data, we're talking about prices going back to where they were towards the end of last year. So, people make long‑term investments in housing. They typically hold on to houses for more than a few months or even a couple of years and what we've seen in this country is very strong price growth and what most, if not all, of the forecasts have predicted is that we will see price growth in the future as well.
Journalist:
Treasurer, mortgage demand from first‑home buyers has fallen around 20percent. So do you think it's really made a difference for them? What's your message to those who have seen their equity drop significantly since the budget?
Chalmers:
First of all, as I've said, there's a number of factors playing out in the housing market and the changes that the government has made is not the only influence on the decisions that people are making in the housing market.
The second point is that housing is a long‑term investment. People make investments over years, often decades, rather than from month to month.
The third point is this: the changes that we made in the budget, the really important changes to give first‑home buyers a fairer go in the housing market, which has locked them out for too long, should be judged over the course of the next few years, not over the last few months. We have seen volatility in house prices. There are a number of reasons for that, but when people make these long‑term decisions, they factor in a whole range of things, and the impact of our policies should be judged on the coming years not on the last couple of months where there has been volatility for a whole range of reasons.
Journalist:
When did you know the ATO was planning to ban credit cards and why did you wait until now to step in?
Chalmers:
Well, the ATO made this decision late in September, not to accept credit card payments. Obviously, we were aware before then that they were grappling with this issue since the-
Journalist:
- When were you made aware-
Chalmers:
- Obviously, in the lead‑up to taking that decision, we were made aware. We were informed by the ATO. I don't know the specific timing of that. Of course, we were aware that they were considering what to do in response to the Reserve Bank's announcement some months before that.
We insisted once we were aware that these changes were being proposed, we insisted on a transition period, which initially was from the beginning of October until the end of November, and today we are substantially extending that period so that the ATO has the opportunity and the time to consult more, particularly with small business, on their implementation of this ban. So, the decision that they took was in the last week, I believe, of September. They informed us in the lead‑up to that. We insisted on, initially a couple of months for the transition, but now we are quite substantially extending that.
Journalist:
Isn't this indicative as well of some of the unintended consequences of the surcharge ban? It's not just the ATO. It's childcare centres, private schools, planning to ban credit cards. Is it a mistake, the policy?
Chalmers:
I don't believe so. As I said before, we try not to interfere or intervene, whether it's the design of the surcharge ban or the implementation. We've stepped in here for good reason and on behalf of small business.
When it comes to the reforms more broadly, I mean, we shouldn't lose sight of the fact that Australians paid $1.6billion in surcharges last year. Australians get, I think, very annoyed when the price that they see on the menu is not the price they pay when they tap their card or their phone. So, the reforms are about addressing those legitimate concerns that people have.
Now, one of the neglected elements of this is that part of the package is to save small businesses more than $900million a year in interchange fees. That's one of the changes here. So, you can already see in the Westpac interchange fees, and I think in some of the others, that those fees have been cut. So, there's benefits for small business as well when it comes to those interchange fees. That's part of the broader reform, which is about making sure that the price that Australians see on the menu is the price they pay when they tap their phone or their card.
Journalist:
Why didn't the government [inaudible] these rolling consequences that [inaudible]? Why didn't you anticipate it?
Chalmers:
Well, the initial 2‑month consultation period was part of anticipating this change that the ATO has announced. But what we're doing today is making it clearer, and for longer, that the ATO will continue to accept credit cards until the end of June next year and that will give them more time to consult.
Journalist:
The general decision that the Tax Office made to ban credit cards was that made independently without any conversation with government?
Chalmers:
It is a decision taken independently by the ATO. They informed us in the lead‑up to taking this decision and that's when we insisted on, initially, the 2‑month transition period, the period that we have substantially lengthened today.
Journalist:
So, outside of that transition period, you're saying that you or the department had no input to the decision to ban credit card payments?
Chalmers:
We've been in discussions with the ATO. I spoke with the Tax Commissioner very early this morning before I put this proposal with my wonderful colleague Daniel Mulino, the Assistant Treasurer. Daniel and I put this proposal to our colleagues this morning and, before we did, I made sure to talk with the Tax Commissioner about it. I briefed him on the proposal that we were putting to our colleagues to fund an extension so that the ATO would have time to do more consultation.
For example, when it comes to genuine hardship or for example when it comes to trying to work with the card providers to get the cost down further, the difference between expensive providers and cheaper providers- all of these are the sorts of considerations that the Tax Commissioner will plug into his consultation. He now has longer to do that because we've stepped in the way we have today.
Journalist:
Regardless of the 8‑month delay, how is it not a double standard for small businesses to be made to wear the surcharge cost when the ATO is not?
Chalmers:
Well, I think it's pretty obvious that the ATO doesn't have the ability to set their own prices. They're implementing the tax system. So, it is a different proposition when it comes to the ATO implementing tax rates versus small businesses and others setting prices for their goods and services. So, I think there is a difference there.
I acknowledge that that is one of the points that has been made with us in the feedback that we've received from the small business community and others, and the feedback that the ATO has received as well. But this is a really important way for us to show that we take that feedback seriously. And to finish up, the thing that unites the outcome that we've announced on card surcharges with the outcome that we're announcing on disaster funding is that when it comes to disaster funding, when it comes to card surcharges, we've taken consultation and feedback very seriously.
We're always working to do the very best that we can, in the context of quite substantial constraints in the budget, to do the best that we can for people. And that's what these 2 announcements are all about today. In the context of a very responsible budget, making sure that we do what we can to listen and to respond to feedback. And we have been managing the budget responsibly, one of the reasons we've got an AAA credit rating from all 3 of the major credit ratings agencies is because we've been managing the budget responsibly, finding savings, banking upward revisions to revenue, limiting spending growth where we can, but also to make room for the sorts of announcements that we make today, which show that we take consultation and feedback very seriously.
Disclaimer: Curated by HT Syndication.
