What a surprise. We finally get some credit card reform and those gouging monopolists at VISA are mounting a court challenge. Peter Mair is not amused.

This appeal was predictable. In anticipation of it, I have long asked that the Commonwealth Parliament enact more effective trade practices legislation — stronger law than the current Trade Practices Act which is inadequate to prevent collusive price setting contrary to the broader public interest.

A ‘Dawson’ Committee of Inquiry is currently reviewing the trade practices law and its administration. My submission to this Committee (No. 5 and addenda) puts a case for stronger law. The case is founded on the way banks have exploited weaknesses in the current law to set prices in credit card schemes clearly contrary to the public interest.

Pending the report of this Committee expected in November, no substantial legal costs should be incurred by the Reserve Bank in responding to the VISA appeal.

As foreshadowed recently on ‘Crikey’ and Radio National, I have also asked the Treasurer to remove the Reserve Bank from any continuing involvement in the administration of ‘competition policy’ for the Australian banking and payments system. The RBA is not up to this task — it should have been ‘begging’ the Government to enact effective trade practices legislation, instead it has ‘played the game’, wasting time on ineffective and inadequate regulatory reform when it should have been supporting the ACCC..

The way the Reserve Bank abandoned its principles and ‘sold out’ the community when making its ‘final’ and ‘no appeal’ decisions on credit card regulation, makes its continuing involvement inappropriate. Ideally the community would be so appalled by the unjustifiably soft line that the Reserve bank took against the VISA credit card scheme that it would also be appealing the Reserve Bank decision. Only the community was left powerless.

Let us now hope the Dawson Committee does the right thing and fixes the Trade Practices Act. Let us hope the ACCC is put back in charge of ‘trade practices’ in the banking industry and given effective legal power to protect the public interest.

Lets hope.

Feedback to Peter Mair at [email protected]

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW