DRIVING THE DAY

WHEN WILL ATO OVERTURN ITS CREDIT CARD BAN?

It’s a question of when, not if, the Australian Taxation Office reverses its ban on accepting credit card payments.

Cabinet ministers are still consulting how to arrive at an elegant back down, but it will happen for several reasons:

— It’s a distraction. If $200 million must be found for the ATO to recoup the cost of processing card payments and make the distraction go away, that’s what will happen.

— It’s hypocritical: Ministers can’t be out on TV telling small businesses to suck up the cost of credit card transaction fees, when their own massive government department won’t abide by the same practice, and when the agency didn’t do the basic forward planning to allow a reasonable solution.

— It’s incoherent: Other government departments and agencies including Treasury (which, like the ATO, is under Treasurer Jim Chalmers’ direction), DFAT and Border Force are continuing to allow credit card payments.

— There’s no Cabinet unity: With Clare O’Neil and Anne Aly out expressing concerns, at odds with the more on-message assistant minister Andrew Charlton, the controversy has a distinct ‘backdown incoming’ vibe.

WHAT THEY’RE REALLY SAYING: One Labor MP, granted anonymity to discuss internal debates, said the ATO decision “is annoying, it messes with the message. We wanted to be talking about consumers no longer being stung, getting surcharges on things they were buying … which can be quite substantial for things like laptops.” Instead, the debate had focused on “teething issues.” Other elements that have gone missing from the debate are that the reforms include transparency around fees charged and a cap on fees, both elements that should help the vendors.

Reality check: There are no free lunches, and no number of ministerial TikTok videos will change that.

All cards have a fee because you are paying for the convenience of the card as a service. Credit cards have higher fees than debit cards because you’re paying to be loaned the money, rather than accessing your own money. And all those card perks? The airport and department store loyalty points, and the rideshare discounts: they don’t fund themselves.

ATO IN HIBERNATION: The ATO wouldn’t answer POLITICO’s questions Thursday, someone thought it was clever to instead point us to a seven-day old public statement, on the condition that we not tell you ATO had directed us to the statement.

No deal, and not good enough ATO!

The questions we still need answers to:

— When did ATO first become aware of the cost implications of having to absorb credit card transaction fees?

— When did you take the decision to no longer accept credit card payments?

— Why were impacted stakeholders only given five hours notice?

The ATO still accepts debit card payments via BPay, but that isn’t washing with cash-flow poor small businesses.

WHAT’S NEXT? The ATO doesn’t provide services for a fee — but plenty of other government departments and agencies do. Which leads ACCI chief executive Andrew McKellar to ATO’s refusal of credit card payments as “the first manifestation” of this bigger issue:

“Will other agencies, will other providers say that they don’t want to wear the cost, or that they’re going to struggle to pass it on?”

Your flat whites are now more expensive because there was no enforcement against that happening. Who’s going to control fees for passport applications, national police checks and intellectual property registrations, as agencies inevitably bend to pressure to confirm they will continue to accept credit card payments?

RENT GROWTH SLOWS NATIONALLY — RENTS DOWN IN SYDNEY

Rents have increased by 0.5% in the September quarter, a slowdown on the 1.6% and 2.1% increases in the preceding two quarters, per Cotality’s Quarterly Rent Review. National median dwelling rent is now $713 a week.

Rents are growing faster in the regions (up 0.8%) than capital cities (up 0.4%), but rent is cheaper in Sydney this quarter (down 0.4%). The national vacancy rate crept up from 1.7% to 2.1%, but is still below pre-2020 levels (3.3%).

According to Cotality’s research director Tim Lawless the slowdown in rent rises is due to past rent rises outstripping wages for five years, meaning renters are at the limit of what they can pay. A decrease in net migration is also taking pressure off demand.

“Rental growth was strongest through the pandemic when average household sizes fell sharply as people sought additional space, then experienced a second wind as international borders reopened and rental demand increased without a commensurate uplift in rental supply,” Lawless said. “Renters are reaching an affordability ceiling. Our June affordability data showed rental households were dedicating about 34% of their pre-tax income toward rent, the highest level on record.” In other words: around half their after-tax income is going to rent.

DRIVING THE WEEKEND — CPAC, THE CONSERVATIVE WOODSTOCK

CPAC Australia’s two-day national conference kicks off in Brisbane on Saturday.

The $7,000 “Platinum Experience” is sold out (and you had to undergo vetting to make the list), along with “Golden Tickets” and the gala dinner — but you can take a third-class ticket for $54 if you take out a CPAC membership.

WHAT WE’RE WATCHING

Opposition Leader Angus Taylor and One Nation chief Pauline Hanson deliver dueling speeches: Who fills the room, who gets the most applause and whose speech will leave them facing awkward questions in parliament Monday?

The support acts: One Nation treasury spokesperson Barnaby Joyce and right-wing podcaster Karl Stefanovic top the B-list. Nationals’ Matt Canavan and Bridget McKenzie, Liberals Jacinta Nampijinpa Price and Dan Tehan and the U.K.’s shortest-serving Prime Minister Liz Truss are also scheduled. Guests will enjoy Donald Trump and Anthony Albanese impersonators.

Did you know? Barclay McGain, a former Young LNP member booted for urging Australians not to “celebrate a culture that couldn’t invent the bloody wheel,” is now CPAC Australia’s brand relations manager.

THE PLAYBOOK INTERVIEW

ALAN GAMLEN — OUR MIGRATION PROBLEM ISN’T TOO MANY ARRIVALS

Professor Alan Gamlen is a migration expert at the Australian National University and Director of the ANU Migration Hub. He spoke with Amanda Copp.

This interview has been edited for length and clarity.

Do you think the Coalition’s proposed cuts to the net overseas migration number are possible?

Cuts of that scale and pace certainly raise questions about feasibility, both economically and politically. Economically, the reason we have large inflows of migration is because they supply essential services and sovereign capabilities. So if you cut them suddenly rather than weaning industries off them, it’s a cold turkey shock and that can be disruptive and harmful to everyone.

Do you think its plan will actually fix the problems the Coalition are pointing to?

People generally think the problem is too many people coming in. That is not the problem. The problem is that we’ve had low departures. And the low departures have happened because of the pandemic.

For very good reasons during the pandemic, governments around the world, including the Morrison government, granted their temporary migrants extensions and relaxations of visa rules because those people were caught by an emergency. Those various relaxations and extensions are still expiring. Many of them won’t expire until 2030.

Do you think that the Coalition is right when they say infrastructure is not keeping up with migration?

I think they do have a point, but this is not necessarily a problem of migration so much as a problem of planning.

The fundamental reason we have migration is because we need to keep a relatively large working-age population. In rich countries like Australia, we’ve got aging. As more people retire, that population becomes more expensive, the tax base from the working age population becomes smaller and smaller, and standards of living drop.

Migration policy analyst Fergus Peace says the Coalition’s numbers don’t add up — that they imply a much deeper cut to migration than suggested. What do you think?

I’m glad that Fergus has done that arithmetic. I have not. Life is too short.

I think the Coalition’s approach is much more along the lines of just slam the brakes on, whatever the cost. It has a real whiff of this being a political approach, rather than a policy approach. It probably couldn’t be implemented without real harm.

PARTY ROOM

ONE NATION — PLEASE EXPLAIN CARTOONS WILL CONTINUE

As One Nation hones in on 20 winnable seats in the Victoria state election, the mastermind behind One Nation’s viral “Please Explain” series, Mark Nicholson, says he’s making a Victorian election special episode, and will keep making the cartoons if he wins a seat in Victoria’s upper house.

Indeed, Nicholson told Finn McHugh he’d “have a panic attack” if he was forced to give the cartoon series up. Nicholson is top of the One Nation upper house ticket, for the Northern Metropolitan region. Read POLITICO’s story here.

Verbatim: “These cartoons mean a whole lot to me,” he said. “I’m going to pour my heart and soul into these things because I absolutely need it.”

“It’s given me a better understanding of the people in politics, which is good because I then also understand that they’re just corrupt and pathetic people,” he said.

“Please Explain” episodes rack up an average of 500,000 views, and become must-watch content inside federal parliament.

The cartoons most recently branded Andrew Hastie as a “traitor” and featured 22-year-old Sen. Charlotte Walker as a “tiny little girl boss” strapped into a baby car seat and drinking a “babyccino.” Walker was voiced by Peart’s 2-year-old daughter.

Before joining One Nation, Deputy Prime Minister Barnaby Joyce was also portrayed with a beetroot for a head. “Albo is by far my favorite [to create]. I’ll be so upset when One Nation kick him out of the Lodge,” Nicholson said.

It wasn’t the only time Nicholson has drawn controversy or divided Hanson and Joyce: It was Nicholson who pledged to lock up former premiers Daniel Andrews and Jacinta Allan “by Christmas,” at One Nation’s Victorian election launch Oct. 3.

GREENS — RUSH TO ENDORSE SHOEBRIDGE: The Greens have signed up 900 new members in the week since Sen. David Shoebridge took charge, their biggest surge since the 2025 election, SMH’s Nick Newling reported. The article also lays bare how little we know about membership figures of political parties.

LIBERALS — FRYDENBERG’S BOOK LANDS: In an excerpt published by The Australian, Frydenberg covers Simon Holmes a Court’s superiority complex and the difficulty of facing off against Monique Ryan, a teal with “no identifiable policies.” He writes that “even on climate, a supposed priority, Ryan was completely vacuous.” Calling 2022 “the nastiest campaign I can remember,” Frydenberg contrasts how he says Ryan and her volunteers behaved with compliments for Anthony Albanese and Jim Chalmers respecting a campaigning “code of honor.”

LIBERALS — HASTIE, CHAMPION OF THE WORKERS: Speaking to Triple J, Andrew Hastie, shadow minister for industry and sovereign capability, told Dave Marchese: “I think big business, particularly, have gotten very comfortable with what could be construed as almost a slave workforce” which comes about because temporary visa holders “are non-unionized and cheap.”

“If we care about workers, we’ll actually care about getting the migration system right, which is why we’re going to reduce the overall stock of temporary visa holders by 650,000,” he said.

STATE OF THE NATION

THE LEGACY OF NEGLECT: Australian businesses are asking why they’re being lectured on security requirements, when the federal government has owned up to running a patchwork of legacy systems after the OpenAI Medicare data breach. Cyber Security Coordinator, Lt. Gen. Michelle McGuinness, faced the pointy question at a Protective Security and Government Conference Thursday.

“Recently, we’ve seen a spotlight on government systems being drawn into cyber incidents due to legacy architecture. What message does this send to business or critical infrastructure?” an anonymous Slido user probed.

“It says we’re all in it together,” McGuinness said. “We all have legacy tech. It is expensive, and there is more work to be done … It shouldn’t be viewed just as old, but if it can’t be mitigated or updated, then it’s at risk.”

And the key data is in the vault anyway, Defense Minister Richard Marles said at a press conference in Victoria.

“If you look at the sort of areas where we hold our most sensitive data, and that might be individuals’ data or it might be our most important national security information — I mean, that is being constantly probed, there is constant attention in respect of that.”

“But our security is maintained, and that’s because of the work that [the Australian Signals Directorate] does.”

CANBERRA MEETS WORLD

TO BOLDLY GO ... BACK TO EARTH — WHY OZ SAID NO TO EURO ASTRAL VISION

As Canada inks a new strategic partnership with the European Union, Australia continues to pick and choose how it engages. Industry Minister Tim Ayres revealed to parliament that Australia said no to becoming a full member of the European Southern Observatory treaty, bringing Australia’s strategic partnership to an end in 2027.

Astronomical asking price: $580 million over 10 years.

The department prefers instead to invest in Horizon Europe — a $153 billion research fund that Australia will join in 2027, which routinely generates large returns for non-EU countries that participate, sometimes up to 11:1, the department said.

Industry department officials were provided with talking points to let down disappointed stakeholders in early April. The first reason: “the current global climate, where the Middle East crisis has meant government needs to focus on the most pressing matters for Australians.”

Sounds like the optics of Labor having its head in the stars killed the idea. Inwards, not upwards, comrades!

COALITION OPEN TO CHINA FTA 2.0

Ted O’Brien, shadow minister for foreign affairs, told an academic audience he rejected “any suggestion Australia should decouple its economy from China,” and instead previewed the idea of a China-Australia Free Trade Agreement 2.0 “to provide deeper access for Australian services and investment, and a tackling of non-tariff barriers.”

O’Brien also said Australia is “overly exposed to the China market,” meaning “we diversify where dependence creates vulnerability; we deepen trade where there’s mutual advantage or our economic strength gives us leverage.”

He argued that “foreign affairs starts at home” because “if our foundations — our economy, resilience and social cohesion — are fragile, our ability to uphold our values and pursue our interests are jeopardized.”

‘Think like deal makers, not just policy makers’: A former Accenture negotiator, O’Brien said the U.S. cannot meet its own demand for AI compute and services and Australia needs to muscle in. First, by securing a government-to-government framework for access to frontier AI models and improved cyber defenses, then “position Australia as the Indo-Pacific’s most trusted partner in AI” including hosting other nations’ data and compute.

“American frontier AI capability, combined with Australian energy, land, infrastructure and smarts can accelerate the AI ambitions of both countries,” he said.

AGENDA ASSISTANT

AI COMMITTEE, AGAIN: The Joint Select Committee on Artificial Intelligence sits in Melbourne, hearing from CDC Data Centres, the Business Council of Australia, the Australian Banking Association, and three big banks (Westpac, NAB and ANZ).

LOCAL CANBERRA

COME MEET THE G-G (OR HANG OUT AT HER HOUSE): Government House’s annual open day, when Sam Mostyn’s doors are opened to the public, is tomorrow from 10 a.m. There’ll be community stalls and live entertainment on the grounds.

BON-SEE SOME TREES: Canberra’s Bonsai Society — yes that’s a thing — hosts its annual exhibition at Canberra High School this weekend.

DOGS’ DAY OUT: Literally the name of Floriade’s dog-friendly Sunday, when you can bring your pooch to the flower festival from 9:30 a.m.

COLOR RUN: The starting gun for a casual fun run with foam, bubbles and obstacle stations fires at 9:30 a.m. at Weston Park on Sunday.

COMMUNITY CORNER

LOBBYING OLYMPICS

Ewan Kelly, a former adviser to prime ministers Kevin Rudd and Anthony Albanese, has established the Lobby500 ranking.

The service ranks and profiles Australia’s lobbying and government relations firms. Its first release puts Envoy Public Affairs at the top of a list based on its number of clients. Envoy is run by former Labor Minister Stephen Conroy. Hawker Britton, the original Labor-aligned lobbying shop is the next most in-demand.

The ranking is informed by data from the Attorney-General’s Department’s lobbyist register and other public sources.

MOVES AND APPOINTMENTS

APPOINTED: Annabel Whitehouse joins ABC Canberra as a digital producer and journalist. Jordan Newnham is now Accenture’s Australia and New Zealand government and public affairs lead.

HIRING: Commissioners for parliament’s independent workplace investigatory body (the Independent Parliamentary Standards Commission).

BIRTHDAYS

TODAY: Tasmanian upper house Labor MP Sarah Lovell, former departmental secretary Lionel Woodward, former U.K. Prime Minister David Cameron.

SATURDAY: Helen Haines adviser Eli Davern, California Gov. Gavin Newsom, Maddox’s Gavan MacKenzie.

SUNDAY: Shannon ‘The King’ Noll.

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Labor searches for exit from ATO credit card mess