Assistant Treasurer Daniel Mulino has acknowledged that the federal government knew the Australian Taxation Office was considering ending credit card payments months before businesses were told about the plan, prompting fresh criticism from Shadow Treasurer Tim Wilson. The admission adds a significant new element to a dispute that has already forced the government to fund a temporary solution. At issue is not only whether credit cards should remain an option for paying tax, but when ministers became aware of the proposal and how they responded. For small businesses, that timeline matters because payment choices can affect day-to-day cash flow.
Mulino told the ABC’s Insiders program that he and Treasurer Jim Chalmers were aware of the ATO’s thinking earlier in the year. He said the agency was examining options and appeared to favour no longer accepting credit cards. According to his account, the government encouraged the ATO to continue discussions with card companies and provide a transition period. This is a more specific account of the timeline than earlier broad acknowledgments that ministers had been aware of the issue before the decision became public. It gives the opposition a clear point of scrutiny: what was known, when, and why the eventual announcement left businesses frustrated.
The ATO’s original plan was to stop taking credit card payments from a date late in the year. Businesses reacted strongly when the proposed change emerged, concerned about losing a payment option they used to manage tax obligations and cash flow. The federal government subsequently intervened to fund a transition that would allow payments to continue into the following year. That intervention is a confirmed change from the original plan, not a permanent resolution of how the associated processing costs should be handled. A future decision is still needed about the longer-term arrangement.
Credit card payments may appear to be a narrow technical matter, but they can have a direct impact on business finances. Some owners use cards to manage the timing of payments between customer receipts, supplier expenses and tax deadlines. Removing that option could require them to find another way to meet obligations within the same time frame. Others may prefer different payment methods and experience little disruption. The financial consequences therefore vary, but the concern expressed by business groups is understandable. For some firms, the availability of a payment method is about flexibility rather than convenience alone.
The controversy developed alongside changes to card surcharge rules following decisions by the Reserve Bank of Australia. The RBA’s surcharge reforms and the ATO’s consideration of credit card acceptance are related parts of the story, but they are separate decisions made by different institutions. A ban on merchants passing on particular card surcharges does not automatically require the tax office to stop accepting cards. The ATO faced the question of who would meet processing costs if surcharging arrangements changed. Confusing those issues can make it sound as if a single policy automatically triggered every subsequent step, when the decision-making involved several bodies.
The ATO has said that bearing the full cost of processing credit card payments would have a substantial financial impact. Taxation Commissioner Rob Heferen explained that the agency would have preferred to keep accepting cards, but that card companies had not offered fees low enough to make the option workable on the terms being considered. Those statements describe the agency’s financial reasoning; they do not determine whether the chosen implementation process was adequate. The dispute has therefore moved from a question of cost to a question of consultation and whether alternatives received sufficient examination before businesses were informed.
Mulino defended the government’s initial approach as one of encouraging negotiation and a transition. He said indefinitely absorbing processing fees would have major budget consequences. That is an important part of the government’s explanation, because public money used to cover fees must come from somewhere. But the fact that a permanent subsidy could be expensive does not answer every criticism of the original timeline. The immediate issue is whether officials adequately recognised the practical impact on small businesses and whether a shorter transition would be enough. Mulino has acknowledged that feedback led ministers to change their approach.
Wilson’s response was that the government had months to deal with the problem before the backlash became public. He questioned how ministers could describe the original plan as an independent ATO decision while later choosing to underwrite a transition. That criticism should be identified as the opposition’s argument. It does not prove the government directed the agency to make the initial decision, nor does it establish that ministers could have secured any particular result from card providers. It does, however, focus attention on the relationship between ministerial oversight, an agency’s operational judgment and political accountability for consequences affecting businesses.
The Australian Chamber of Commerce and Industry has also criticised the consultation and notice period. Its chief executive, Andrew McKellar, has raised concerns about businesses being told of a potentially significant change only shortly before it was made public. Industry groups can provide direct evidence of members’ concerns, although their preferred policy outcome remains a position they advocate rather than an automatic public-interest conclusion. The business community is calling for a durable way to maintain payment options, with questions about who ultimately pays the associated fees still unresolved.
The prime minister has described receiving a message from McKellar and then moving quickly to secure a change. That sequence became politically contentious because it prompted questions about whether earlier warnings had been acted on and how Treasurer Chalmers was involved. Chalmers has rejected suggestions that he was overridden in a personal contest with the prime minister. The distinction matters. The public record supports reporting that the decision led to questions about government coordination, but it does not justify declaring an internal feud to be an established fact on the basis of opponents’ interpretations.
The latest admission differs materially from the earlier parliamentary exchange between Wilson and Minister Anne Aly about when officials learned of the planned change. Aly had said she only became aware of the decision when it was announced, while the government later funded a transition. Mulino’s account adds information about earlier awareness at a different level of government and in a different stage of the process. Those statements should not be merged into an allegation that all ministers had the same knowledge at the same time. Considering a possible policy earlier in the year and making a formal decision months later are distinct events.
For businesses, the immediate outcome is that credit card payments remain available during the temporary arrangement. Yet the continuation of a payment method does not necessarily mean the underlying fee issue has disappeared. If government pays the processing costs, that expense is reflected in the public budget. If card providers reduce fees, the economics could change. If businesses are required to use different methods in future, cash-flow concerns may return. The practical policy question is how to maintain workable ways of paying tax without creating an unexplained burden on businesses or public finances.
There is also an accountability issue for agencies that make operational decisions with broad economic consequences. Independent administration can be valuable because it separates routine decisions from political direction. At the same time, ministers remain answerable for the government’s overall policy settings and for what officials communicate about foreseeable impacts. The ATO’s legal responsibilities, the Reserve Bank’s surcharge rules and the Treasury portfolio’s policy choices should not be treated as one undifferentiated authority. A useful examination asks each institution what it controlled, what it knew and what alternatives were available.
Political arguments about the government’s handling may continue, but the facts should not be stretched to fit a predetermined narrative. Mulino has acknowledged early government awareness. Wilson has accused ministers of failing to act soon enough. The government says it instructed the ATO to pursue negotiations and ultimately changed course in response to feedback. None of those positions alone settles whether the final long-term arrangement is financially or administratively sound. A complete assessment will require the costs of available options, the outcome of discussions with card companies and the level of consultation with the people affected.
The new development is a timeline disclosure with direct implications for public accountability. It adds evidence to the debate about when the government knew a significant business payment option might disappear, and it clarifies the explanation ministers now offer for their response. Small businesses have won more time, but not yet a definitive permanent solution. For readers trying to follow the dispute, the key distinction is between the ATO’s initial plan, ministers’ earlier knowledge, the government’s later intervention and the continuing argument about processing costs. Keeping those elements separate makes the controversy understandable without exaggeration.
