Senate Education and Employment Legislation Committee, , 6:53:15 to 7:15:10
Analysis of how new credit card surcharge rules affect childcare providers and parent payment options.
Topics: Education, Cost recovery
Speakers: Speaker 27, Senator Matt O'Sullivan, Unknown Speaker, Senator Marielle Smith, Ms. Kylie Crane
>> Oh, yeah. takes out to the break. That's since the 1st of October, businesses have been under charge uh a search charge, separate sir charge for most credit card payments. Uh, I assume this applies to childcare early learning >> Thank you. >> Mr. What what engagement did the department have with ECE providers before that change took effect? >> Um it was discussed I mean we have discussed it with stakeholders. Um it was discussed at one of our um stakeholder reference groups that Miss >> an engagement >> generally treasury would have been
responsible for communication of that stakeholders in our formal forums. Are
you at all familiar with how many services previously charged sir charges? >> I'm not sure I've got data on that. No, sorry. >> I don't think we can collect that down. >> The Guardian reported on the 29th of September that uh Kubby OSH, the out of school hours care provider, told families it would stop accepting credit card and debit cards because of the new search charge rules. Has the department received advice that other ECE services are restricting card payments for the
I haven't had advice from any services that um they are stopping credit card accepting credit card payments but I assume it's a business choice that some
>> Is the department aware at all of how many parents are using credit cards to pay for their childare services?
>> We don't collect that information in the discussions that I mentioned before where we had um where this was discussed at some of our stakeholder forums like our formal reference group. I understand it is a fairly significant proportion of families that use credit cards but we don't have figures or a percentage on
that. So before the decision was made to uh ban the use of sir charges uh pass on the use uh sir charge was did treasury consult you at all or the responsible agency consult you at all in relation to how many parents might be using
>> um I'd have to take on notice whether they consult with the department I'm yeah I'd have to take that on notice but what I would say is that most services and most third party software providers that interact with the financial side. So that where where there the interaction between parents and um and provider systems offer a range of payment methods. So it could be direct debit or it could be that um that uh parents can choose when to transfer the money. So there are um usually with these software providers a number of payment options that u parents can use.
>> So the government's promoted this as a cost living relief but providers still face payment processing costs. Has the department assessed whether or not they're able to absorb those costs or whether they're simply just going to have to pass it on by way of other
>> We haven't modeled
>> Um the
>> I would say I would say sorry Senator I would say that the service delivery price project that um the minister referenced before is um is collecting cost information from a range from from service and that would increased cost.
>> Sorry. Does that include the cost that service providers are having to incur for
>> It would include that cost.
>> It would include that.
>> It it includes all current costs.
>> Uh and were the final question was the when for services receiving the worker retention payment were card processing costs considered when the fee cap was set and how those services expect to
manage these costs now? So all available information was considered when the fee cap um was set and so that information I don't have the timeline on me when that information was available. What what is what what I would say is that the fee capping for the um worker retention payment did give a buffer. So it takes into account several ABS indices when it when we determined that amount and there is a buffer but it is something you know the department would continually look at um and provide advice to ministers. If we think that cost pressures are exceeding the available cap then we can provide advice to government but at this stage we think that the cap isn't a reasonable amount and the feedback that we've got from the sector is that the cap is a reasonable amount. I would say that where a particular business
>> cap's going to have to absorb this search charge now
>> it it it will form part of their cost base where where a service
they're saying well we just won't take credit cards anyway
>> yeah and that would be a business choice but in relation to the fee cap services can apply for a higher fee cap if they are under viability stress. So while the current fee gap is in place for the majority services where their costs are exceeding their revenue, they can apply to the department to get an alternative fee cap to raise um but they have to show evidence that their costs ex you know are exceeding their revenue to be able to get that um higher fee cap.
>> Thank you Mr. Reid. Uh apologies for the interruption but we're now overdue for our suspension. So we'll suspend for 15
returning at 402 um and we'll be continuing with this
uh and we're returning in outcome one early childhood and Senator Payman has the call.