The Turnbull government has announced plans to crack down on unnesccesary credit card surcharges as part of its response to a wide-ranging review into Australia's financial system.
Prime Minister Malcolm Turnbull made the announcement on Tuesday morning, saying that in many cases, a 2 or 3% surcharge for using a credit card is excessive.
"Businesses are free to charge their customers what they like in a competitive market. There's no law that says you've got to charge so much for a hotel room or an airline flight," he told reporters in Canberra.
But the PM also said that cab companies, restaurants and retailers slugging shoppers with extravagant surcharges should be a thing of the past.
"If you go out there and you say there is a 2 or 3% surcharge for using a credit card... [that's] a very clear representation that the merchant is recovering the costs of you, the customer, using a card as opposed to paying in cash."
"The fact is that we all know, it's very widely known, that in in many cases, these surcharges are well in excess of the real cost," he said.
Greens MP Adam Bandt has backed the move, but said the crackdown should extend to ATM fees.
"It's time that people weren't paying for the privilege of accessing their own money," Bandt said on Tuesday morning. "Banks are making over $600 million a year out of ATM fees and much of that is going straight to bank's bottom line.
"There is no reason to allow banks to continue to gouge customers with ATM fees of $2 or $2.50 when it only costs you $0.77 to get your money out."
Labor has offered support for many of the government's initiatives but said it wants more information before giving the final tick of approval.
"We'll wait to see the detail, but clearly the Murray Inquiry responded to community concerns," shadow Treasurer Chris Bowen said on Tuesday. "Those community concerns are well founded."
Of course we've been active in the credit card space through our senate processes and we'll continue to do so, but in relation to surcharging this is a real issue which needs to be addressed and again we're happy to work with the government to ensure that's the case."
The government plans to introduce legislation to "ban excessive card surcharges" some time in 2016, although there was no explanation of exactly what the legislation would look like on Tuesday morning.
We'll ban merchants from imposing card surcharges that are greater than their actual costs https://t.co/OYuxvwgyFh
The announcement was part of the government's response to the Murray review into Australia's financial system.
The government has broadly backed all but two of the recommendations in the review, which touched on everything from superannuation regulation to cyber security and consumer protection.
The government's response to the review is likely to form a key battleground in the upcoming election, due to be held in 2016, as the government and opposition gear up for a battle over superannuation, penalty rates and the ~future~ of Australia's 'smart' economy.
The review had been sidelined under former prime minister Tony Abbott after some of the issues became too contentious, but under Turnbull and new Treasurer Scott Morrison all options appear to be back on the table.
Among other issues to be debated from the review will be the dominance of the 'big four' banks and regulation of crowdfunded start ups. The government will also force all financial advisers to hold a degree, pass exams and subscribe to a code of ethics.