Review card payment surcharges

The ACCC is urging small business owners to start preparing now for the ban on excessive payment surcharges that will apply to all businesses across Australia from 1 September 2017.
The new law limits the amount that a business can charge customers for use of payment methods such as EFTPOS (debit and prepaid), MasterCard (credit, debit and prepaid), Visa (credit, debit and prepaid) and American Express cards issued by Australian banks. It came into effect for large businesses last year.
“Small businesses that choose to impose payment surcharges should review their surcharge levels to ensure they are compliant when the ban starts applying to them in under two months,” ACCC Deputy Chair Dr Michael Schaper said.
“Businesses can only pass on to customers what it costs them to process a payment such as bank fees and terminal costs. For example, if your cost of acceptance for Visa Credit is one per cent you can only surcharge one per cent on Visa credit card payments onto your customers.”
Small businesses will shortly be receiving information from their bank, which will help them to calculate appropriate surcharges when accepting debit and credit cards. The ACCC has also published a fact sheet so business owners can better understand their obligations.
“Banks are required to send businesses merchant statements that clearly set out the business’ costs of acceptance for each payment method. The ACCC urges businesses to follow up with their bank if they have not yet received these statements,” Dr Schaper said.
Passing on the cost of processing debit and credit card payments is not mandatory for businesses and the ban has no effect on those that do not impose a payment surcharge.
“In the lead-up to last year’s excessive surcharging ban on large businesses, many reviewed and amended their surcharging practices to reflect the costs to the business and we hope small businesses will do the same,” Dr Schaper said.
The ACCC has published guidance material for consumers and businesses.
The ACCC has been given new powers to enforce the ban.
A surcharge will be considered excessive where it exceeds the permitted cost of acceptance, as defined by the Reserve Bank of Australia.
The RBA’s website also provides detailed information for businesses about the Standard, including how businesses can identify and quantify those costs that can be passed on to a consumer as a surcharge.
Payment types that are not covered by the ban include BPAY, PayPal, Diners Club cards, American Express cards issued directly by American Express, cash and cheques.

Promising signs for an easing of inflationary pressure

The latest Dun & Bradstreet Business Expectations Survey is showing early signs of success in the fight against inflation, with a five point decrease in selling prices expectations since the previous survey.

The survey reveals that fifty seven per cent of firms now anticipate higher selling prices in the June quarter than a year earlier, while three per cent expect a decrease. This result comes on the back of national accounts and retail sales figures which indicate that domestic spending has started to moderate.

Following high December quarter expectations, the outlook for growth in profits has declined to an index of zero. Thirty two per cent of executives now expect an increase in profits and thirty two per cent expect a decline. This flat growth outlook reflects the impact of lower sales volumes and higher costs.

Sales growth expectations have also declined from December quarter highs, with 38 per cent of executives now expecting an increase in sales growth in the June quarter. Despite the decline the sales index is significantly higher than twelve months ago, with sales growth expectations up thirteen points on the June 2007 quarter. The net retailers’ sales expectations index is particularly strong; at twenty nine it is fourteen points above the all firms index of fifteen.

Expectations for capital investment have strengthened marginally with the overall net index now at two per cent. Durables manufacturers are showing quite strong expectations for growth in capital investment with the index at seven per cent.

The employment indicator has returned to negative territory after one quarter in the positive. Twelve per cent of executives now expect to have more staff in the quarter ahead than they did a year ago; thirteen per cent expect to decrease staff numbers.

Executive concerns regarding the tightening credit market remain high, with more than half (56%) of executives expecting a tightening of credit will have a negative impact on operations.

Meanwhile, just nine per cent of executives anticipate that they will seek finance or credit to help their business grow in the quarter ahead. These findings come as the RBA warns that banks will make borrowing harder as part of the process of reigning in excess growth in the economy.

According to Christine Christian, Dun & Bradstreet’s CEO, early indications of an economic slowdown are positive however the wide reaching impacts of inflation are likely to continue impacting business for some time.

“Early signs of an economic slowdown are beginning to show through in executive expectations for sales, profits and selling prices. National accounts data and retail sales figures are also indicating a slow down,” said Ms Christian.

“The impact of the high cost of funding and the tighter credit market are being seen in expectations for business growth – less than ten per cent of executives expect to seek finance to grow their business in the coming quarter.

“All of these figures indicate that the RBA’s fight against inflation is beginning to take effect. However, despite this, it is likely that inflationary pressure will continue to have wide-reaching impacts on the economy for some time.”

Topping the list of concerns this month, thirty nine per cent of executives rank interest rates as the most important influence on operations. This figure remains unchanged since the previous survey however concerns from the retail sector have increased by eight per cent. Fifty three per cent of retail executives now rank interest rates as the most significant influence on operations in the coming quarter. The continued high level of concerns regarding interest rates, particularly by retailers, comes as the official cash rate has reached a 12 year high.

Wages growth has overtaken petrol prices as a primary concern for executives. An increase of 14 per cent in this index since December has pushed concerns to their highest level in eight months. Twenty seven per cent of executives now expect wages and salary growth to be the most important influence on their business in the quarter ahead. This relatively steep increase is likely a reflection of executive concerns that high inflation figures could feed back into wages expectations.

Petrol price concerns have eased slightly but remain high as oil prices continue their surge above USD $100 a barrel. Twenty six per cent of executives rate the cost of fuel as the most important influence on operations.

Meanwhile, the impact of recent movements in petrol prices remains unchanged since the previous survey, with 78 per cent of executives noting a negative impact on operations.

According to Dr Duncan Ironmonger, Dun & Bradstreet’s economic consultant, the Australian economy needs to see an increase in capacity and a reduction in demand if inflation is to be constrained in 2008.

“Capacity increase will be a slow process dependent on increases in labour supply and infrastructure. As a result, all official policy action is focused on quickly reducing demand,” said Dr Ironmonger.

“According to the December quarter national accounts and retail sales for January, a slow down in consumer spending is under way. A continuation of this slow down is critical if inflation is to ease this year.

“The Reserve Bank pushed the cash rate up to 7.25% last week. This move combined with other increases in the cost of funds has resulted in home mortgage rates reaching a level of around 9%; this may be sufficient to put the inflation genie back in its bottle.”


Businesses to greet a gloomy Christmas

The weak Australian dollar, high petrol prices and continued inflationary pressures will continue to hurt Australian businesses, the latest Dun & Bradstreet (D&B) survey has shown.

The new business expectations report indicated a bleaker outlook for the December quarter, with nearly half of all executives reporting the dramatic 20 per cent fall in the value of the Australian dollar since July had worsened their business environment.

Almost 70 per cent of executives anticipate a negative impact of the tightening credit market on their operations, while oil prices continue to pose one of the biggest challenges, with 93 per cent of executives reporting they have negatively impacted their business.

The December quarter is expected to bring a sharp fall in sales, profits, employment growth and capital investment, with all of these indexes in negative territory for the second consecutive quarter.

Selling price expectations are the only exception, projected to hit the highest level in 20 years, an index of 62, following an increase of 11 per cent.

D&B CEO Christine Christian said while business confidence for the coming quarter was set to drop to levels not seen since the 1990s, Australia was better situated compared to other countries amid the current global financial turmoil.

“Australian businesses are undoubted facing some very real challenges, “Ms Christian said.

“Profit margins are being eroded by a slowing economy and escalating funding and goods costs, while the decline in the Aussie dollar is forcing businesses to pay more for their imports.

“However, Australia’s outlook continues to be stable at a time when the economic conditions in many countries are deteriorating very rapidly. Another move by the Reserve Bank to cut interest rates should be received positively by business given its likely positive flow-on effects on spending and investment,” she said.

Submit your infrastructure wish-list

Federal Infrastructure Minister Anthony Albanese and Infrastructure Australia chair Sir Rod Eddington have urged the public to take part in shaping of Australia’s infrastructure spending.

The public and business can submit their project ideas to Infrastructure Australia by October 15 for evaluation and possible inclusion on the national infrastructure priority list.

“We want both industry and the community to be our partners in the long-term effort to fix and modernise the nation’s critical economic infrastructure: our roads, railways, ports, water, energy utilities and telecommunications,” Mr Albanese said.

“In making a submission, we are asking people to look beyond their own street or neighbourhood and put forward ideas and suggestions that will strengthen the national economy.

“We as a government do not believe that we have a monopoly on all the good ideas for Australia’s future,” he said.

Sir Eddington said the call for submissions was to facilitate public discussion of how the nation can better plan, finance and build major infrastructure.

“We have indications that members of the community, including people working in industry and government, have both ideas and information potentially of great value to our work,” he said.

“We know that for a long time we’ve had a major infrastructure deficit and that the Reserve Bank warned on 20 occasions that was leading to capacity constraints in the economy, leading to upward pressure on inflation and interest rates."

Mr Albanese said $400 billion plus infrastructure spending in the long term was critical in ensuring sustainable economic and social development.

“We know that urban congestion, if left unaddressed, will cost some $20 billion by the year 2020. That’s a good example of why this is not just an economic issue, but a social issue because many working parents are spending more time commuting to and from work in their cars, than they are at home with their kids,” he told the Nine Network.


“After all, when we talk about infrastructure, we’re talking about areas that have an immediate impact on people’s lives.

“Often, we only notice it when it doesn’t work, when you can’t get the train, or urban congestion is occurring, or we have water restrictions. So we want the community to have input, because this affects people’s everyday lives,” Mr Albanese said.

The discussion paper calls for evidence-based submissions, which should be no more than 15 pages and sent to with "Submission" in the subject field.

A copy of the discussion paper, as well as information about how to prepare and lodge a submission, is available at

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