20 October 2015
Transcript - #2015058, 2015

In the role of: Minister for Small Business and Assistant Treasurer [21 September 2015 - 18 July 2016]

Interview with Justin Smith, 2UE

SUBJECTS: Government’s response to the Financial System Inquiry.

JUSTIN SMITH:

The Assistant Treasurer Kelly O’Dwyer is on the line. Ms O’Dwyer thank you for your time.  

MINISTER O’DWYER:

Great pleasure, Justin.

JUSTIN SMITH:

I haven’t talked to you since you got your new job.

MINISTER O’DWYER:

No.

JUSTIN SMITH:

Are you enjoying it?

MINISTER O’DWYER:

I am indeed, it’s been a busy time these last couple of weeks and we’ve been getting on with the job as you can tell with the announcement today.

JUSTIN SMITH:

Tell me about it. How’s this going to work on the ground for us? What am I going to save?

MINISTER O’DWYER:

What’s going to happen is that instead of shops being able to pass on excessive surcharges for you pulling out your credit card for instance and saying that you want to use that to pay for your goods or your services at that particular location, instead of them being able to charge that excessive surcharge, they will only be able to charge the actual cost for them and pass them on to you.

SMITH:

And as we calculate it, what would it be - a standard cost? What should we be paying?

MINISTER O’DWYER:

Well it is different in different industries and depending on these different merchants and what they are actually saying to you that they are going to apply to you. Some of them have been incredibly excessive and this is part of the problem here. They are being charged, let’s say, two per cent or less than two per cent and then they are charging you a fee to use your credit card of upwards of ten per cent, in some instances. Now that is clearly excessive and we want to put a stop to that because it is totally unfair on consumers.  Now it is right for businesses to be able to charge for their services and to set their fees, and to charge for the products that they sell but it is certainly not right for them to mislead customers and pass on a fee that is not commensurate with that fee.

SMITH:

Kelly, is it right to get that two per cent anyway, should the banks look at skimming that down a bit as well?  I mean is that really a true cost for them two per cent?

MINISTER O’DWYER:

Well I was using that as an example, the interchange fees…

SMITH:

Yeah but it is a good one, it is about right.

MINISTER O’DWYER:

Yes, the interchange fees do vary and currently there is a review that is taking place with the Payment Systems Board which is part of the Reserve Bank of Australia we are looking at how we can reduce the fees that banks charge one another to provide these sorts of services. So we are looking at that end as well as the consumer end so that we can reduce the cost right the way through.

SMITH:

Alright. What is the timeline on this? What do you hope the timeline is?

MINISTER O’DWYER:

Certainly we are hoping to get a report back from the Payments Systems Board before the end of the year and in terms of these excessive fees that we are going to transition that in and we are going to do that as early as next year.

SMITH:

It is good talking, thank you very much, appreciate it.

MINISTER O’DWYER: 

Great pleasure, Justin.