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Speaker 1: Already and this is the Daily This is the Daily

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Speaker 1: Oh oh, now it makes sense.

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Speaker 2: Good morning and welcome to the Daily Ours. It's Wednesday,

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Speaker 2: the first of April. I'm Emma Gillespie, I'm Billy fitz

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Speaker 2: Simon's Happy April fools.

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Speaker 1: Oh oh my god.

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Speaker 3: True, what's a joke?

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Speaker 1: No, just a.

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Speaker 3: Living except it's not a joke. It's real life.

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Speaker 2: It's a real life. But what I hope for everyone

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Speaker 2: today is that you don't get caught in some embarrassing prank.

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Speaker 1: And it is a good day because fuel is cheaper today.

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Speaker 2: From today, fuel is cheaper. Congratulations. That is no prank.

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Speaker 2: That is the one hundred percent real news truth.

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Speaker 1: Now.

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Speaker 2: It is one of a couple of big cost of

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Speaker 2: living relief measures that have been announced this week, just

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Speaker 2: over the last few days. And these are all initiatives

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Speaker 2: promising to lower the price of our everyday life. That

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Speaker 2: includes a ban on cardsword chargers, of course, the cheaper

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Speaker 2: fuel that we're going to talk through and we'll unpack

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Speaker 2: all of that in today's deep dive. But first here's

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Speaker 2: a quick message from the TDA team.

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Speaker 1: Hello.

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Speaker 4: My name is Sky I am a partnerships manager at

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Speaker 4: the Daily OS which put simply means I help bring

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Speaker 4: in the money. A big part of my job is

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Speaker 4: organizing the ads for this podcast. TDA is an independent

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Speaker 4: media company, which means we partly rely on the ads

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Speaker 4: to grow our team, which in turn means that we

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Speaker 4: can keep delivering you the news that makes sense. The

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Speaker 4: best way you can help us is by pressing follow

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Speaker 4: a five star review on Apple or Spotify is even better.

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Speaker 4: And thank you for being part of the TDA community.

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Speaker 1: So am I feel like it was during the pandemic

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Speaker 1: that cost a living sword inflation was crazy, and then

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Speaker 1: we had maybe about six month period where kind of

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Speaker 1: wages were increasing again and it seemed to be not

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Speaker 1: getting better but at least plateauing. And then now it

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Speaker 1: seems to be at the center of every conversation again,

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Speaker 1: I think mostly because of the war. Yeah, what's kind

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Speaker 1: of the state of play when it comes to cost

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Speaker 1: of living right now?

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Speaker 2: Well, cost of living relief and conversations about cost of

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Speaker 2: living pressures are really front and center once again.

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Speaker 3: Of course they didn't disappear. You're absolutely right.

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Speaker 2: We've been talking about cost of living on and off

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Speaker 2: for six years, maybe five years at least. But thanks

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Speaker 2: to this conflict in the Middle East, which has caused

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Speaker 2: massive disruptions to global oil supplies, we've seen this flow

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Speaker 2: on effect. And you know that is coupled with higher

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Speaker 2: than expected inflation, which was already on the rise before

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Speaker 2: the conflict. We've seen consecutive rate rises from the RBA,

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Speaker 2: higher unemployment figures, stagnating growth, We're seeing increased redundancies. So

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Speaker 2: all of that paints a lot of uncertainty in a

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Speaker 2: picture of a cost of living era that is persisting.

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Speaker 2: So now we have this other conflict in the Middle

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Speaker 2: East that's just really added to exacerbate at all of that.

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Speaker 1: And so today we're going through two new measures that

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Speaker 1: have been announced this week. The first is from the RBA,

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Speaker 1: which is Australia's Central Bank. Yeah, they have announced a

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Speaker 1: ban on card surcharges.

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Speaker 3: Yes.

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Speaker 2: Now, this is the extra fee when you tap your

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Speaker 2: phone to pay for something, or you tap your card

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Speaker 2: or swipe your card, you will usually be charged about

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Speaker 2: a one to two percent fee. Now from October that

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Speaker 2: surcharge is going to be banned. This has been a

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Speaker 2: long time coming. The RBA actually began looking into these

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Speaker 2: surcharges in twenty twenty four. That was part of its

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Speaker 2: own review in tackling the cost of living, and it's

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Speaker 2: part of a broader shakeup of payments. So systems are

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Speaker 2: going to be reformed broadly. That will include cutting inter

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Speaker 2: change fees. That's the fee that businessnesses pay or that

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Speaker 2: businesses pay banks for transactions. So there are changes coming

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Speaker 2: for us as consumers, but also for businesses. Now this

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Speaker 2: is really significant, or the reason the RBA was looking

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Speaker 2: into this is because card transactions have become such a

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Speaker 2: prolific and prominent part of our everyday lives. Card transactions

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Speaker 2: outpaced cash for the first time back in twenty sixteen,

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Speaker 2: and since then we've seen cash become less and less

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Speaker 2: of a fixture in our daily lives, while you know,

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Speaker 2: tap and go is pretty much it for most people,

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Speaker 2: especially young people.

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Speaker 1: Yeah, it's funny talking about this as a cost of

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Speaker 1: living measure, which I know is why the RBA did it.

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Speaker 1: They have said that, and when we put this on

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Speaker 1: the Daily ods feed yesterday, I saw there were comments

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Speaker 1: from people saying, you know, oh, thank god, now I

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Speaker 1: can pay my rent.

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Speaker 3: And I know that it's not a huge amount.

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Speaker 1: But it is interesting to think about how much we

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Speaker 1: would actually spend because it does add up. You know,

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Speaker 1: if you think about how much you're tapping your card

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Speaker 1: every day, it does add up. If every single time

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Speaker 1: you tap your card there's an extra twenty cents there,

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Speaker 1: it adds.

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Speaker 2: Up to around sixty dollars a year on average per

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Speaker 2: card using adult But of course, you know, depending on

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Speaker 2: your lifestyle and who you are and where you're at

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Speaker 2: and how you interact with transactions, that could be a

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Speaker 2: lot higher or a lot lower, you know, depending on

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Speaker 2: who you are. But overall it costs consumers about one

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Speaker 2: point two billion dollars a year. So that's the RBA's

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Speaker 2: own modeling on what these search charges cost. As I mentioned,

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Speaker 2: it's about one to two percent in extra fees. The

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Speaker 2: fee depends on the card used, on the merchant providing

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Speaker 2: the transaction. Consumers pay, businesses pay, so you know, MasterCard

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Speaker 2: or Visa for example, they will charge processing fees that

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Speaker 2: we all absorb. What's interesting though, that I learned researching

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Speaker 2: this for today's episode, Billy, is that debit cards are

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Speaker 2: actually cheaper to process than credit cards. So debit card

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Speaker 2: think you're you know, your everyday saving count card that

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Speaker 2: you use.

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Speaker 1: I did know this because when I switched to a

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Speaker 1: credit card, I considered it.

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Speaker 3: Yeah, but I wanted the points. Well, I'm a bit

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Speaker 3: of a points loyalist.

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Speaker 2: I'm glad that you brought up the points because there

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Speaker 2: has been a bit of inequality here. So the point

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Speaker 2: of sales system, the actual technology, the thing that you tap,

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Speaker 2: it's very difficult for those things to tell the difference

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Speaker 2: between a debit card and a credit card.

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Speaker 1: I was wondering this because when you tap your card,

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Speaker 1: it already has the surcharge on the FPOs machine.

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Speaker 3: Yes, so when we were saying that it is.

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Speaker 1: Different for different cards, I've been thinking, but how do

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Speaker 1: they know which one I'm.

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Speaker 3: Going to use?

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Speaker 2: Well, thank you for asking. When I say debit cards

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Speaker 2: are cheaper to process, it doesn't mean that debit card

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Speaker 2: uses a paying a lower fee. What ends up happening

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Speaker 2: is transactions charge a blended fee for all card payments,

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Speaker 2: and this creates this issue called cross subsidation, where debit

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Speaker 2: card users are essentially funding credit cards spending, so debit

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Speaker 2: card users' sorry and paying more so that you, billy

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Speaker 2: can game the system and use your credit card and

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Speaker 2: get your points for your frequent flyers.

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Speaker 3: Wah, I did not know that. I am sorry to

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Speaker 3: all the debit cards.

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Speaker 2: So interesting, but it really plays into, you know, why

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Speaker 2: the RBA felt it was important to look into this

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Speaker 2: and to have a real conversation about is this fair?

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Speaker 2: Are these fees necessary? So the RBA basically says that

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Speaker 2: surcharging is not valid anymore. It's not achieving its original purpose,

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Speaker 2: which was basically to encourage consumers to make more informed

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Speaker 2: decisions about efficient payment methods. You know, back in the day,

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Speaker 2: I think if you can remember when we had the

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Speaker 2: option to you know, insert a chip swipe a card,

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Speaker 2: when tap and go or contact lests wasn't as prolific,

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Speaker 2: but contactless really is the method that so many of

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Speaker 2: us have adopted.

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Speaker 3: It's so convenient and quick.

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Speaker 2: But that surcharge is no longer really proving its point

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Speaker 2: or is no longer serving a purpose for small businesses.

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Speaker 2: We know that nine to ten owners believe that banks

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Speaker 2: are actually profiting off these card processing fees. That's according

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Speaker 2: to some research from AMP Bank.

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Speaker 1: Go.

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Speaker 2: So, businesses, consumers, we're all offered.

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Speaker 3: None of us want fees.

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Speaker 1: Okay, I'm interested how banks and businesses have responded to

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Speaker 1: this then if they were potentially profiting off this. But first,

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Speaker 1: here is a quick message from today's sponsor. So, M

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Speaker 1: you said before that businesses and banks have potentially been

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Speaker 1: profiting off these card searcharges. Now that those are banned,

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Speaker 1: I presume they will no longer be able to do that.

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Speaker 3: So how have they responded.

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Speaker 2: It's a little bit complicated because you can ban the

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Speaker 2: search charges, but you can't ban a business from, say,

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Speaker 2: increasing its prices by one to two percent to cover

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Speaker 2: the costs that they may have to absorb from these transactions.

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Speaker 2: So in a bid to kind of minimize that or

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Speaker 2: reduce the chances of that happening, the RBA is capping

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Speaker 2: fees that providers and banks can charge businesses, so visa

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Speaker 2: MasterCard and banks will only be able to charge a

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Speaker 2: certain amount of fees, and it's hoped that that will

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Speaker 2: create higher transparency and ultimately pass on savings to businesses

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Speaker 2: and consumers. The RBA is estimating that this could save

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Speaker 2: businesses around one point two billion dollars a year because

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Speaker 2: there's been a cap on the fees that merchants can

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Speaker 2: charge for the transactions.

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Speaker 1: It is interesting that conversation of whether businesses will just

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Speaker 1: now increase how much they are charging customers.

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Speaker 2: Yeah, and we have no say in it, really, but

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Speaker 2: Choice the Consumer Group has been really pushing for these reforms,

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Speaker 2: and it also wants a review in the next two

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Speaker 2: to three years, basically to ensure that the changes are

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Speaker 2: having the intended effect. So they're calling for this kind

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Speaker 2: of continuing monitoring to make sure that transactions do become

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Speaker 2: cheaper and easier and more convenient for everyone involved, businesses

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Speaker 2: and consumers alike.

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Speaker 1: I imagine that would be a hard thing to monitor because

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Speaker 1: you can just increase your prices and say that it's

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Speaker 1: because everything's getting more expensive that we have had to

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Speaker 1: do this, and in order to actually pinpoint the exact

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Speaker 1: cause of why something has gotten more expensive, Yeah, wouldn't

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Speaker 1: be an easy.

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Speaker 2: Task, especially not when we're talking about a margin of

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Speaker 2: one or two percent. But you know, there will be

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Speaker 2: auditing and there will be very obvious paper trails between

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Speaker 2: you know, what Visa MasterCard and banks are charging to

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Speaker 2: use the f POS machines, what we are paying at

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Speaker 2: the checkout, what businesses are taking home at the end

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Speaker 2: of the day.

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Speaker 1: Okay, so that is cards sur charges. That change is

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Speaker 1: coming into effect in.

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Speaker 3: October, you said, yep.

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Speaker 1: And then also this week completely separately, Yeah, the government

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Speaker 1: has announced that it will have the fuel excise, which

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Speaker 1: if you don't know what that is fair enough because

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Speaker 1: it's a little known tax that we all pay.

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Speaker 3: Every time we go to the pressure station.

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Speaker 2: Yeah, this has been a major story this week. I'm

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Speaker 2: sure all of our listeners are well tuned in to

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Speaker 2: the fuel crisis and what's going on, But a quick refresher.

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Speaker 2: With the Middle East conflict, with the war between the US,

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Speaker 2: Israel and Iran, we've seen the Strait of Hormuz cut

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Speaker 2: off for most fuel tankers. The Strait of Homus is

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Speaker 2: off the south of Iran's coast. About twenty to twenty

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Speaker 2: five percent of global oil is shipped through that vital

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Speaker 2: shipping lane, so obviously that's been cut off since the

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Speaker 2: twenty eighth of February. Now, the impact of that has

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Speaker 2: been massive price increases to fuel around the world. We've

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Speaker 2: been particularly hard hit in Australia with a lot of

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Speaker 2: panic buying. For some context on where things are out.

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Speaker 2: As of Monday, according to the NRAMA, the average price

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Speaker 2: for regular unleaded in Sydney was at two dollars fifty

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Speaker 2: eight eliter that increased by fourteen and a half cents

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Speaker 2: in a week. Diesel has reached three dollars twenty three

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Speaker 2: per liter, up eleven cents in a week. Now in

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Speaker 2: the regions, regular unleaded rows about eleven cents per liter

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Speaker 2: in the week to Monday, but diesel swed twenty six

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Speaker 2: point three cents per liter on average in one week.

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Speaker 3: Wow.

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Speaker 2: So that gives you a sense of how intense this

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Speaker 2: surge has gotten, how stressful, and how much pressure it's

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Speaker 2: put on not just drivers, but people and manufacturers and

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Speaker 2: agriculture businesses and transport companies and vital transport services. So

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Speaker 2: we've seen the conversation then pushed to well, what can

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Speaker 2: the government do to intervene here? Because things are blowing

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Speaker 2: out so rapidly, something needs to change. That was, you know,

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Speaker 2: the argument from the opposition and many consumers and transport

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Speaker 2: industry spokespeople. So the fuel ex size is being halved

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Speaker 2: for the next three months too, lower petrol prices to

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Speaker 2: deal with this intense inflation. The fuel X size specifically

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Speaker 2: is a tax. It's easiest to think of it as

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Speaker 2: a tax or a levee that's added to petrol it's

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Speaker 2: existed for well over one hundred years. It's technically paid

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Speaker 2: by manufacturers, but they pass it on to the customer.

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Speaker 1: That seems to be the trend of the episode. Yeah,

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Speaker 1: business is passing on the.

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Speaker 3: Cost about they have to pay their bills.

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Speaker 2: To capitalism Billy. Many countries have an equivalent tax to

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Speaker 2: the fuel excise here, so it's not just us. In

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Speaker 2: the UK, they pay about a dollar a liter extra

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Speaker 2: on top of their fuel prices. The fuel x sise

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Speaker 2: in the US is about twenty cents per liter, so

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Speaker 2: we sit somewhere in the middle. Until today, our fuel

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Speaker 2: x sise was fifty two point six cents per liter

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Speaker 2: of petrol, so that's how much extra we were paying.

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Speaker 2: The government announced on Monday that that would be halved.

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Speaker 2: This applies to petrol and diesel, so unleaded diesel both included,

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Speaker 2: and that will reduce fuel costs by about twenty six

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Speaker 2: point three cents a leter from today from Wednesday. In

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Speaker 2: terms of what does that actually look like when you

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Speaker 2: use your card to tap and go to pay for

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Speaker 2: your petrol with your one to two percent surcharge, it'll

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Speaker 2: reduce the cost of a sixty five liter tank by

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Speaker 2: about twenty bucks a week according to the Federal Treasurer.

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Speaker 3: That's quite a lot. Yeah, so it is pretty significant.

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Speaker 2: It will also ease the burden on farmers, transport, manufacturers,

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Speaker 2: essential services. The Prime Minister Anthony Albanezi has set that

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Speaker 2: he does want this to flow on to those industries

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Speaker 2: and it's not just about drivers that you know, we

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Speaker 2: should still be mindful about our fuel consumption and use

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Speaker 2: public transport where possible.

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Speaker 1: When we were doing the reporting on this and we

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Speaker 1: looked at the fuel excise and how much it was,

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Speaker 1: I was surprised to learn that it was fifty two

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Speaker 1: point six ye cents per liter, because I know that

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Speaker 1: the government has done this before, or the Government of

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Speaker 1: the day has done this before, because the Coalition did

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Speaker 1: it to help the cost of living crisis.

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Speaker 3: I think like four years ago, March twenty twenty two.

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Speaker 1: Yeah, there you go, and it was something like forty

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Speaker 1: It was somewhere in the forties and I didn't realize

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Speaker 1: that it had increased that much in just that short period.

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Speaker 2: Well, I mean, like any tax inflation is applied, of course,

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Speaker 2: there are reviews and audits. These numbers tend to go

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Speaker 2: up and the fuel excise is no exception, So yeah,

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Speaker 2: you're right. In twenty twenty two sitting at about forty

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Speaker 2: four cents a liter. That was during the early months

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Speaker 2: of the Russia Ukraine War, So after Russia invaded Ukraine,

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Speaker 2: a lot of countries refused to purchase oil from Russia

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Speaker 2: at the time a significant supplier of the world's oil.

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Speaker 2: That placed a massive strain on global supplies, very similar

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Speaker 2: to what we're seeing now. And the Coalition government at

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Speaker 2: the time, you're right, half to the fuel excise, that

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Speaker 2: was a decision it made to have for six months.

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Speaker 2: Right now we're just looking at the next three months.

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Speaker 2: But Angus Taylor himself, the opposition leader, urged the government

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Speaker 2: to adopt this policy, citing twenty twenty two and the

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Speaker 2: then coalition government decision to do the same. At first,

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Speaker 2: Albanezi was a little bit cautious or hesitant to tell

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Speaker 2: us which way he was leaning, but on Monday he said,

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Speaker 2: we're making fuel cheaper. We understand that Australians are under

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Speaker 2: serious pressure now. That decision came out of national Cabinet

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Speaker 2: when state and territory leaders met on Monday morning to

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Speaker 2: talk about the next steps and how we can tackle

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Speaker 2: this fuel crisis.

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Speaker 1: And so how do we think that that will impact

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Speaker 1: the economy, will make everything better?

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Speaker 2: Well, the opposition and the government both wanted the fuel

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Speaker 2: excise halved. They're saying it won't put pressure on inflation.

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Speaker 2: Plenty of economists are saying otherwise. I suppose the conversation

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Speaker 2: has sort of split into is it about relief immediately

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Speaker 2: or are we more concerned about the long term economic impacts?

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Speaker 1: Quick question with them saying that it won't impact inflation,

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Speaker 1: won't it improve inflation? Because if inflation is about prices

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Speaker 1: getting higher over time, this limits that by making petrol cheaper.

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Speaker 2: Well, the school of thought is that lower prices equal

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Speaker 2: more consumption. So if petrol is cheaper and is so

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Speaker 2: cheap that everyone makes the decision to go and fill

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Speaker 2: up freely and readily, you know, whenever they drive past

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Speaker 2: a servo, that can lead to inflationary problems because it

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Speaker 2: doesn't drive down spending. With petrol being as expensive as

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Speaker 2: it is, we're seeing behavior change. We're seeing consumers become

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Speaker 2: more reticent to go and fill up, or make different

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Speaker 2: decisions about how they get to work or where they're

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Speaker 2: going to travel to over the easter long weekend or

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Speaker 2: are they going to get a train?

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Speaker 1: But even with this decrease in petrol prices by twenty

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Speaker 1: five cents per lead or whatever it is, it's still,

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Speaker 1: even with that discount, more expensive than it was prior to.

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Speaker 2: The war, significantly more expensive.

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Speaker 3: And the NRMA has pointed to this.

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Speaker 2: They've said that the fuel excise, the difference in the

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Speaker 2: tax change isn't really going to be that obvious immediately

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Speaker 2: because prices are so high and continuing to rise, the

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Speaker 2: harving of the fuel ex sise will be absorbed into

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Speaker 2: that quickly, and we could still see unlettered, for example,

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Speaker 2: surging towards three dollars over the coming weeks or months

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Speaker 2: per leater. So there's still going to be a lot

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Speaker 2: of pain at the bowser. I did read some suggestions

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Speaker 2: from a group of policy experts at Victoria University. They

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Speaker 2: suggested that better designed relief could look like direct help

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Speaker 2: to the people under the greatest pressure, So rather than

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Speaker 2: subsidizing fuel for all users, having direct payments to low

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Speaker 2: income households for example, or targeted support for fuel using

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Speaker 2: industries and essential services. We saw something very similar in

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Speaker 2: New Zealand, where the government there has announced a subsidy

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Speaker 2: for low income households. About one hundred and fifty thousand

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Speaker 2: families in New Zealand will have access to about fifty

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Speaker 2: bucks a week to subsidize fuel costs at the moment,

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Speaker 2: and that subsidy will be in place for a year

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Speaker 2: or until petrol prices significantly turn around. So just some

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Speaker 2: interesting policies and different approaches that we're seeing around the world.

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Speaker 2: But in Australia, this is what we've got for now,

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Speaker 2: and I'm sure it's relief to drivers everywhere at least

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Speaker 2: for the short term.

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Speaker 1: And we know that the Australian government is releasing its

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Speaker 1: federal budget in May.

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Speaker 3: You'll be in camera for that.

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Speaker 1: Yes, ma'am, so it will be interesting to see if

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Speaker 1: they announce any more costs of living measures for that.

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Speaker 1: But until then, thank you, em, Thanks Billy, and thank

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Speaker 1: you so much for listening to this episode of The

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Speaker 1: Daily Oz. You would have heard from Sky earlier in

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Speaker 1: today's episode. We are really wanting to grow our podcasts

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Speaker 1: at the moment and wanting more young people to find

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Speaker 3: So if you could press follow.

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Speaker 1: On whichever podcast platform that you are listening to this on,

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Speaker 1: with the headlines, but until then, we hope you have

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Speaker 1: a lovely day.

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Speaker 3: My name is Lily Maddon and I'm a proud Arunda

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Speaker 3: Bungelung Caalcuton woman from Gadighl country.

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Speaker 1: The Daily oz acknowledges that this podcast is recorded on

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Speaker 1: the lands of the Gadighl people and pays respect to

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Speaker 3: both past and present.