This is why productivity policy is difficult. The losers are easy to identify, and they often have loud voices. Winners, in this case a large number of people who collectively have more than 60 million debit and credit cards, are disparate, disorganised and unlikely to recognise the gains on offer.
Card surcharge ban: Albanese, Chalmers and RBA face nasty, brutish fight to save people $60 a year
Published 2 days ago• 2 minute read
, elements of the small business community were out complaining about the proposed changes, even though most of their members – if the Reserve Bank is correct – stand to benefit.
Would a person paying an extra 8 or 9 cents on their breakfast purchase be willing to take on the few companies (and their financial backers) who will warn of calamity if these changes are introduced?
There’s another element of the productivity debate at the heart of the RBA’s proposals.
It’s the Australian Competition and Consumer Commission’s job to make sure consumers (and businesses) aren’t ripped off if they pay a surcharge.
In the 18 months to the middle of last year, the commission received about 2500 reports about surcharges, ranging from direct shopper complaints to merchants wanting to understand their responsibilities.
That’s a lot of inquiries to run down for an agency that is tracking all sorts of other issues, from petrol prices to funeral services.
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As the RBA noted, there could be trouble if surcharges were banned on debit cards but allowed for credit cards. There are about 8 million “combination” cards, which have both debit and credit facilities, in the hands of shoppers.
Confusion, it found, could lead to some retailers unintentionally surcharging a debit card or lead a shopper to believe they had been slapped with a surcharge. That’s why the bank is recommending a ban on surcharges for both types of cards.
Making more and more rules is one thing. It’s another to enforce them. And, in this case, the Reserve seems to concede that enforcement is too expensive and too difficult.
The bank believes its changes can be in place by the middle of next year, which means it has to deal with the blowback that will now flow from those who would prefer no change. The government may have to introduce legislation, which would give vested interests another chance to knock these ideas on the head.
The nasty, brutish fight to save a few dollars for each one of us is just starting.
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