Senate Economics Legislation Committee [Part 2], , 1:00:42 to 1:05:29
The ATO discusses the impact of the credit card ban on small business cash flow and acknowledges that earlier stakeholder engagement could have improved the transition.
Topics: Government spending, Procurement
Speakers: Rob Heferen, Speaker 6, Unknown Speaker
>> It was an option. So in July um it was an option um but your evidence is that as a decision wasn't actually made until shortly before the 1st of October which is when it was announced. Is that
>> We came to our decision or I guess we not use the wei. Uh I came to the decision based on obviously on advice from uh my uh senior executive that on the 25th of September decided that was the point at which um uh we would do the propose the uh not accepting credit cards anymore post um uh post 30 November.
>> Well, a lot of small businesses are complaining about the ATO not having told them earlier. So, let's hope you just cleared your name with all of them.
>> And Senator, if I could, I think, um, uh, I mean, hindsight's a wonderful >> Always is. And I I think to be fair with the benefit of hindsight we would have if I had this time over again of course I won't because the you know it's a different world but um in a similar situation when we had the numbers about who actually paid by credit card and I I know it's on the in the public discussion that um of credit card it said about 15 billion's paid so what relatively small proportion of the overall tax revenue of small business. 5% of small business would use a credit card, 2% of individuals. The value of credit card payments around 60% of the value is from large corporate and private and wealthy taxpayers. So on that and basis only 5% of small business would be affected. Um we we went down the path and went down as with the benefit of hindsight and um you know one always hopes to live a bit longer to get a bit wiser at an early stage if we'd had uh a much more open conversation with relevant stakeholders to really put the position and say okay with the search charge ban um we won't be able to obviously we can't pass the search charge on that leaves us in a bit of a problem now as a relatively small number of taxpayers. Uh and I think maybe that uh conversation could have could have operated in such a way to um not quite crowdsource but get get input from um stakeholders who actually want the system to work well um to then say well what are these other options and particularly one of the things we've heard is that uh people would use their credit card to manage their cash flow. Now when I heard that I had uh I had jumped to the conclusion managing cash flow related to a situation where um a person or a business might be struggling and the need of the credit card to help them I I think along with a lot of others would think well actually if you're struggling you aren't going to be able to pay uh what's owed on time. on the credit card would be a a pretty risky way of finance because you're waiting for something to come and it doesn't come in. You're then subject to the very hefty interest charge in the credit card. So, um but of course now I've learned that the managing the cash flow is not about people who are necessarily struggling, but it's about people who simply um uh you know they can get the use of the interest rate period on the credit card to help them manage their Had we had that discussion earlier on, there may have been things we could do in the um in the payment system um deferrals of payment um uh automatic remission of general interest charge and so forth that that happens in other circumstances when business are in trouble. I'm not suggesting that would necessarily be a path go down, but just to make the point that earlier engagement with affected stakeholders um on the base of not of here's here's a solution and you have some time to adjust but rather on the basis of saying look here's a problem and it's a system problem and trying to engage people in how to have that solved. If we got the right stakeholders, including of course some uh Beefio, the Australian small business and family enterprise ombbudsman, um we may well have been in a different situation. Um of course we didn't. uh and and things show that we're not in that situation. But but I just would like to say that um uh the the the experience we had the experience we have now if we'd guess we had the similar thing happen to us again I think would be more active in trying to engage with people earlier rather and rather from the point of view here's a solution you have now time to adjust actually engage in the the problem solving activity itself. Yeah,