Independent MP for Curtin Kate Chaney has called on the Australian Taxation Office (ATO) to reconsider its decision to stop accepting credit card payments for tax bills, warning that removing the option with little notice could place additional pressure on small businesses already struggling with cash flow.
The controversy arose after the ATO announced it would stop accepting credit card payments for tax bills from December 1, following the introduction of a ban on card surcharges. The decision prompted a backlash from small business owners who rely on credit cards to manage expenses and bridge temporary cash-flow gaps.
Chaney raised concerns about the short transition period, saying businesses needed more time to adjust to the change.
“Credit cards are one way businesses manage cash flow when a tax bill lands. Removing that option with around eight weeks’ notice makes things harder,” she said.
Her intervention came as a caravan sales and servicing business owner, identified as John, wrote to financial commentator Scott Pape, the Barefoot Investor, describing his business as being on the brink of collapse. John blamed government spending, higher interest rates and the ATO’s proposed credit card payment ban for worsening the pressures on small operators.
Pape urged the business owner to stop directing his anger towards politicians and instead assess whether his business remained financially viable. He noted that paying tax bills on credit could indicate serious financial difficulties, particularly when a business was already struggling to meet its obligations.
Pape recommended that John contact the Small Business Debt Helpline, a free service staffed by professional financial counsellors with expertise in small business finances. The service can help owners understand their financial position and navigate discussions with the ATO.
The government subsequently responded to the backlash. Treasurer Jim Chalmers announced that the planned restriction would be delayed until June 30, 2027, giving businesses additional time to adjust. Chalmers said small businesses had made clear that the original timetable was inadequate and that the government had taken their concerns seriously.
He attributed the underlying issue to credit card companies failing to offer fees low enough for the ATO to continue accepting payments without passing on surcharges. The government said the delay was intended to provide businesses with greater flexibility while the issue was addressed.
The episode highlights the competing pressures surrounding payment processing costs, tax administration and small business cash flow. While the ATO’s original decision was intended to respond to changes in card surcharge arrangements, business owners argued that removing credit card payments at short notice would make managing tax liabilities more difficult.
Chaney’s call for reconsideration placed her among the voices pressing the government to recognise the practical consequences of the policy for small businesses. The extension until June 2027 provides a longer adjustment period, although the broader challenge of managing tax payments and cash flow remains for financially stretched operators.