The ACT Party is claiming the government's proposed ban on surcharges for contactless and credit card payments is dead, but the minister responsible insists it is still being worked on.
By Giles Dexter of RNZ
The Commerce and Consumer Affairs minister, National's Scott Simpson, introduced legislation last year to ban in-store card surcharges, so shoppers would not be penalised for their choice of payment.
The ban was expected to be in place by May.
Now, ACT is essentially pulling the pin on the legislation, with leader David Seymour calling it "bad economics," and ACT did not support it.
"It's dead. It was always bad economics. It was obviously appealing to take away a fee that a lot of customers hate, but if it only puts that fee on to the small business, it's not actually a win. It's just a shift, and often carried by people that can't afford it at all," he said.
Seymour said the problem with the ban was if the retailer had to absorb the charge, then they would have to raise prices, and people who paid by cash or eftpos would not be able to avoid that extra cost.
"All policies should be judged by outcomes rather than intentions. It was a good intention to give customers a break from an annoying fee, but if the outcome was putting it on to small businesses, then it was never going to be a good idea. And I would say, always judge policies by their outcomes."
Retail NZ 'delighted'
Retail NZ opposed a ban, warning businesses would likely to have to increase their costs elsewhere to recover the payment costs.
Chief executive Carolyn Young said she was "delighted" the bill appeared not to be progressing.
"It's really clear that it's actually not going to proceed anywhere in this term. We've had confirmation of that from the ACT Party, and without the support across the coalition it won't proceed, it won't be able to get passed," she said.
"I'm sure that the government in an election year, with all of these other pressures that are on the economy in the world right now, they won't want to be presenting something to the House that's not going to pass."
Young said Retail NZ was pleased the government had listened to retailers in not progressing the bill.
But Simpson said Retail NZ was wrong.
"No further decisions have been made on the ban on surcharges," he said.
"We know Kiwis are sick of facing excessive surcharges. We are working through aspects of the policy, including monitoring whether reduced interchange fees have been passed on to customers."
Simpson said there would be more to say "in due course."
'Bad economics'
Seymour maintained the bill "clearly doesn't have support" from two of the three coalition parties, after New Zealand First leader Winston Peters said it was "going nowhere" in February.
"And so I think that's the end of it," Seymour said.
"I think it's pretty clear that this is bad economics, bad for small business, and it doesn't have support."
Last month, RNZ reported that progress appeared to have stalled on the bill, although Simpson had said at the time he was "hopeful" the ban would be in place by May, as promised.
At the time, the Prime Minister said the government was taking "a breather" on the policy while it understood all of the implications.
Consumer NZ, which said businesses' costs associated with accepting card payments had reduced since December, had urged the government to press ahead.
ACT had supported the bill through its first reading, but during the Select Committee stage its MP Parmjeet Parmar suggested that businesses could keep surcharges if they offered a free alternative like eftpos or cash.
Young said the ban was a "simplistic solution to a complex area," and while consumers had a choice now to pay by a method that did not incur a cost, such as cash or EFTPOS, a ban would lead to prices going up and everybody paying more.
"A blanket surcharge ban was not a palatable solution for any retailer. Our members told us that they would increase prices because in this economic environment, they couldn't continue to absorb any further prices."
She said in the past ten years, contactless and credit payments had risen from around 40 percent of transactions to 71 percent, and they incurred higher costs than eftpos, which was free to consumers and merchants.
"You've got a big change in the way people are paying, and a big change in the cost it is to retailers. The Commerce Commission, ideally, would have an opportunity now to be able to go away and do a full consultation, understand the landscape, and work out what is the fairest solution for both retail and consumers. And that's what we would support happening going forward."
The bill currently awaits its second reading, four months after the Finance and Expenditure Committee presented its report.
It sat 19th on Wednesday's Order Paper, the list of bills currently before the House.
Without ACT or New Zealand First, National would need support from the opposition to pass the legislation.
The Green Party opposed it at its first reading.
While Labour supported it through first reading, it submitted a differing view in the Select Committee report as it did not support "adding costs to small businesses," and wanted to put forward some amendments in the Committee of the Whole House stage.
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