The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
E&OE TRANSCRIPT
RADIO INTERVIEW
2CC RADIO CANBERRA, LIVE WITH LEON DELANEY
FRIDAY, 2 OCTOBER 2026
SUBJECTS: Scrapping card surcharges; Interest rates; Inflation; Labor’s fiscal discipline
LEON DELANEY: First up today, the federal Member for the seat of Fenner and also by sheer chance the Assistant Minister for Productivity, Competition, Charities and Treasury, Dr Andrew Leigh, good afternoon.
ANDREW LEIGH: Good afternoon Leon, great to be with you.
LEON DELANEY: Although I suspect chance has nothing to do with it – you’re very qualified for the job. Let’s start with the abolition of those surcharges for credit and debit card transactions. It came into effect yesterday. My simple question is this: in light of the fact that many businesses now are saying, ‘We will offer you a discount for cash’, how is that any different from simply charging a fee for using your card? Instead of charging the fee that’s no longer legal, they’ll just give you a discount for anything that’s not on the card. But for all practical intents and purposes, it’s exactly the same thing, isn’t it?
ANDREW LEIGH: Here’s the big difference, Leon. When you’re getting a discount, you’re getting a better price than what you see on the menu or on the shelf. When you’re getting a surcharge, you’re getting the worst price. So what really frustrates people is when you see one price on the menu and then you pay a higher price at the checkout. No one minds getting to the checkout and discovering they’ve gotten a bargain. But people get pretty frustrated when you’re told that there’s one price, whether you’re shopping online or shopping in-store and then that price goes up at the checkout when you choose to pay by tap. That’s gone as of 1 October. A big reform helping consumers but also helping competition. Because most businesses aren’t charging these additional fees. About 84 per cent of businesses don’t have card surcharges. And now this is asking the other 16 per cent to come in line too.
LEON DELANEY: Okay. But for all effective purposes, if a business has previously been charging the surcharge to cover the cost of the transaction, they’re more likely now to increase their price anyway in order to cover that and then offer the discount for the cash transaction, ending up exactly back where we started?
ANDREW LEIGH: I don’t think that’s right, Leon. Let’s take the starting point, which is the vast majority of businesses are not charging these surcharges right now. Every form of payment has a cost to it. Cash has a handling cost, credit cards have a handling cost. As part of these reforms, the Reserve Bank is bringing down the interchange fee. Currently the cap is 0.8 per cent on credit cards. That will come down to 0.3 per cent. So that’s more than halving the cost that hits small businesses. The estimated saving is nearly a billion dollars per year to businesses, mostly to small businesses.
LEON DELANEY: Now, what about this move by the Australian Taxation Office to say that because of this change they are no longer going to accept payment by credit card. This decision has been described by the Australian Chamber of Commerce and Industry as, well, a hypocritical move. It’s effectively one branch of the government acting at odds with another branch of the government?
ANDREW LEIGH: Well like businesses, governments have a choice as to whether to accept certain kinds of payments. The Reserve Bank worked closely with credit and debit card companies to try and get those surcharges down. They weren’t able to get them down to an acceptable level. Again, the vast majority of people who are paying tax debts are not paying them with credit cards. That’s quite a small number of businesses that are choosing to do that. And those businesses have a couple of months before this change comes in. It will kick in in November.
LEON DELANEY: Indeed. And as you say, only a small number of people choose to use their credit card to pay their payments to the Tax Office. But shouldn’t all forms of payment be accepted? If you want to pay whatever it is you owe, you know, surely it’s a bit rude to refuse that payment?
ANDREW LEIGH: Most businesses don’t accept Amex, for example, or don’t accept Diners Club. So it’s already the case that there are payment methods that can’t be used everywhere. If you want to pay in Bitcoin you won’t find many businesses that can do it. It’s okay for businesses to choose not to accept a particular kind of payment. What they can’t do is say that there’s credit and debit card surcharges in place. And Leon, when we surveyed consumers on this, it’s a reform that has been warmly welcomed. People are sick of paying these credit card surcharges, and they’re gone as of yesterday.
LEON DELANEY: Well you know, I’ve always pointed out that the cost of handling cash is actually greater than the cost of those electronic transaction fees. But I’ve had that argument with business representatives and they don’t seem to – they seem to be willing to absorb the cost of handling cash for whatever reason. Maybe they just like feeling the notes and coins in their fingers. What do you think?
ANDREW LEIGH: I reckon there’s a safety aspect to having less cash in your business. It makes you less prone to theft. There’s less that’s attractive for a thief to break in. We certainly know that as the use of cash has declined that there is consolidation happening in that cash handling market. The government is supporting it because we want cash to remain a viable payment mechanism. But it is certainly a minority of consumers that are using cash these days.
LEON DELANEY: Now, in the past week we’ve seen a number of interesting and unfortunate eventualities. Going back to last week, eight days ago, we saw the unemployment rate rise. This week we’ve seen the Reserve Bank of Australia increase interest rates. We’ve seen also the Australian Bureau of Statistics report higher inflation. Things are not looking good at the moment on the economy. Has the government lost control of the economic narrative?
ANDREW LEIGH: The world’s throwing a lot at us. The Reserve Bank made very clear that the war in Iran is pushing up fuel prices and that flows through to the economy. We’re also seeing the data centre investment boom in AI driving up costs in other parts of the economy. Now, obviously government plays a role which is why we’ve had such a big priority on ensuring that we’re making savings decisions.
A $38 billion reduction in spending on the National Disability Insurance Scheme, the changes we’ve made in stopping the Inland Rail at Parkes, the reforms we made to consultants and contractors saving billions of dollars to the budget. So we’ve made a series of tough spending decisions, and that helps work in concert with the Reserve Bank as we’re all trying to tackle this inflation challenge that is hitting economies around the globe.
LEON DELANEY: Now, it’s interesting because the official media release from the Reserve Bank Board earlier this week identified those factors that you just spoke about; global energy prices are now much higher than had been assumed, AI-related demand is driving rapid growth in global prices for technology-related goods, and the Reserve Bank also said that growth in consumer spending is easing gradually as expected.
So when we talk about aggregate demand in the economy, and we’re being told that we have to put up interest rates in order to curb that demand, this inflation is not being driven by demand. Consumers are paying higher prices because they’re being forced to, and consumer spending only grew in the most recent figures because of the rise in the price of fuel. If you take the fuel spending out of it, consumer spending actually went backwards on the most recent figures. The consumers and the mortgage holders are not the people creating this inflation, so why are they being punished?
ANDREW LEIGH: Well, we’ve got 4 dollars out of 5 in demand growth over the past year is in private demand. That certainly indicates that there are some parts of the economy where we’re seeing demand growth increase, and some of that is coming in the business sector. We talked before about the investment boom and the effect that that has on prices.
These elevated fuel prices we’re seeing do cascade through. It’s an important input for farmers, so it flows through to food prices. Anything that has to be carried on roads often has a diesel cost embedded in it. So those fuel costs do cascade through the economy, which is why we’re seeing globally the inflation challenge that we’re experiencing here at home.
LEON DELANEY: That’s right. Consumers cannot control the cost of fuel. They just have to pay a higher price for the same fuel that they would have bought anyway. So it’s not the consumers’ fault, and yet they’re the ones being punished. Now, when we talk about aggregate demand, that is also a demand that includes the spending by the federal government. And the federal government has been very, very quiet on the issue of government spending, but there’s no shortage of critics pointing to the fact that this government is currently spending almost record high amounts of the money available to it as a proportion of the GDP. We’re spending a lot more money as a government than we should be, Andrew. When are you going to rein that in?
ANDREW LEIGH: Well Leon, it’s always easier to talk about spending in the aggregate than spending specifically. We have made spending decisions in order to support bulk billing, for example, or to get more affordable child care. We make no apologies for those productivity-boosting reforms. But we’ve also made tough spending decisions where it comes to curtailing government spending on things that we don’t think are appropriate.
We’ve also made tough decisions that are opposed by the three right wing parties. So for example, we made a decision in the last budget that the private health insurance rebate would be based entirely on income and not on age. There’s about $3 billion in that. That is one of the many tough decisions we’ve made which have seen billions of dollars returned to the budget bottom line. Two surpluses under us and compared to the Coalition who would have gone to the last election offering Australians higher taxes and higher debt, I think our economic management stands up to it particularly well.
LEON DELANEY: Well, that one measure that you just highlighted – the decision to make the changes to the private health insurance rebate, you say that’s a saving of $3 billion, but you’re actually re-spending that money in aged care, aren’t you? It’s not a saving at all on balance?
ANDREW LEIGH: Australians have a number of things that they want us to deliver on. One of those is boosting bulk-billing. You and I have talked about this on many occasions, Leon. And we are spending money here in the ACT to boost the bulk-billing rate. I think that is money well spent. But we’re making tough decisions in order to find other areas of the budget where we’re able to get that money from, and so we’re not putting too much aggregate impact on the economy. And again, this is a predominantly private sector economy – four out of five dollars in the demand growth over the last year have been in the private sector. And that’s reflected in the statements the Reserve Bank has made.
LEON DELANEY: Not consumer spending, though. It’s been a lot more subdued than that. So it’s elsewhere in the private sector. I can’t identify exactly where it is, but I have a suspicion that large corporates and their profits might have something to do with this?
ANDREW LEIGH: We’re certainly seeing healthy profits in some parts of the economy, and I think that’s reflected in the record share of large corporates that pay tax. We had the corporate transparency report out yesterday which showed that the share of corporates paying tax is at a record high. Partly that is that companies are doing well. Partly also it’s our work in closing loopholes, ensuring that multinationals pay their fair share.
LEON DELANEY: Philip Lowe, the former Governor of the Reserve Bank, this week told the Institute of Public Affairs that with the current economic conditions and those tax revenues that you just spoke about, the government really should be running surpluses, not deficits. Why are you not doing that?
ANDREW LEIGH: Well, the deficit in this year just gone is less than half of what it was forecast under the Coalition. We’ve already delivered two surpluses. We’ve made a series of decisions that have left the budget billions of dollars better off than it would have been had the Coalition been in office. Don’t forget that if they’d won the last election then debt and deficits would be higher. So the decisions we’ve made have been the right ones for the economic times. We’re not looking to smash consumers; what we’re looking to do is to make careful spending cuts in order to ensure Australians’ money is spent wisely. We would always prefer to be in surplus than in deficit, but we have delivered two surpluses and brought down deficits very considerably.
LEON DELANEY: Alright, thanks very much for your time today.
ANDREW LEIGH: Thanks so much Leon, take care.
LEON DELANEY: Thank you. Dr Andrew Leigh, the federal Member for Fenner and Assistant Minister for Productivity, Competition, Charities and Treasury.
ENDS