Scott Simpson: Commerce and Consumer Affairs Minister on the open letter urging Govt to rethink surcharge ban

The Commerce and Consumer Affairs Minister is not sharing the same fears as retailers over the surcharge ban.

Scott Simpson says the legislation banning surcharges like PayWave is before the Select Committee and will be in place by next year. 

36 business associations have written a letter warning the ban could be passed on through increased prices.

Simpson says a lot of businesses don't use surcharges - so won't be impacted or need to raise prices.

"The ones that choose to add that pricing in will be actually competitively constrained in the marketplace by those businesses that choose not to do so."

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Episode Transcript

Speaker 1 (00:00):
Business unhappy that the credit card surch charge ban is
going ahead. They want it to be scrapped. In an
open letter to Consumer Affairs Minister Simpson, business leaders around
the country say stopping them from passing on bank fees
will backfire. The warning the ban will mean higher prices
for all customers or more pressure on already struggling businesses.
Either way, not a great outcome, Scott Simpson's would me now, Minister,

(00:22):
good evening, Good day Ryan, What did you make of
the letter?

Speaker 2 (00:27):
Look, I understand the messages that they are sending, but
Retail New Zealand are representing their members and I'm keen
to get a good outcome for New Zealand customers and consumers.

Speaker 1 (00:40):
Okay, So that means going ahead with it? Yeah, absolutely, Okay,
so you just ignore the letter?

Speaker 2 (00:47):
Well, look, listen to the views. The legislation that will
ban these pesky little surch charges is currently at Select Committee.
I'm sure that Retail New Zealand will make a submission.
We'll listen to what they have to say and hear
what the Select Committee decides and then take all those
views into account before the legislation has finally passed.

Speaker 1 (01:07):
You say that businesses should pass on the savings they
get from the banking feed changes made by the ComCom.
Why not force them instead of making it optional.

Speaker 2 (01:18):
Well, by banging surchargers, we are actually forcing them to
pass on those savings. At the moment, there is no
way to guarantee that those savings that the compom is
going to have brought into effect by the first of
December will actually ever be passed on to customers. Currently,
New Zealanders spend about one hundred and fifty million dollars

(01:40):
a year on surcharges and ComCom estimate that up to
sixty five million of that it's actually overcharging by retailers.

Speaker 1 (01:50):
What do you I mean, what do you expect them
to do? The big problem here they're saying is they
get charge the fees. This is their way of passing
them on. Otherwise they have to up the prices. Well,
I mean, what do they what are they expected to do?
What do you expect them to do with those fees
that they have to pay.

Speaker 2 (02:04):
Well, some certainly will pass on the fees, but just remember,
as we've just said that the Commerce Commission is regulating
the price down of those bank fees, So that's coming
down on the first of December. Some businesses will add
costs into the shelf price, but many won't. In fact,
the majority of New Zealand businesses don't charge sir charges currently,

(02:26):
so the ones that choose to add that pricing in
will be actually competitively constrained in the marketplace by those
businesses that choose not to do so.

Speaker 1 (02:37):
Hey, Minister, how excited are you by Christopher Luction's leadership.

Speaker 2 (02:42):
Oh look, we're a team. I think Christopher Luxx's doing
an exceptionally good job as Prime Minister. But you know,
New Zealand's going through difficult times. It's challenging difficult times.
It's been a long, cold, wet winter and the economy
is sluggish. We all know that and we desperately want
it to improve. I'm very confident that under his leadership.

Speaker 1 (03:02):
It will appreciate your time. Scott Simpson, Minister of Consumer
Affairs and big backer of the Boss. For more from
Heather Duplessy Allen Drive, listen live to news Talks. It'd
be from four pm weekdays, or follow the podcast on iHeartRadio.