Prime Minister Anthony Albanese has publicly taken credit for reversing a controversial Australian Taxation Office (ATO) decision to ban small businesses from using credit cards for payments, effectively overruling Treasurer Jim Chalmers. The move follows significant backlash from the business community and growing unease among Labor Party members.

The ATO’s initial ban, implemented with just eight hours’ notice, sparked widespread criticism across small business sectors. The measure, which was introduced last month with a limited transition period, was widely seen as impractical and politically damaging. Housing Minister Clare O’Neil was among the first within Labor to openly acknowledge the issue, highlighting the need for swift action to address the backlash.

Small Business Minister Anne Aly also came under scrutiny after revealing she had not been informed about the decision until it became public, a development opposition parties quickly seized upon as evidence of internal communication failures within the government.

Tensions escalated further when the Prime Minister disclosed that he had received a direct request from the Australian Chamber of Commerce and Industry’s leader the previous Thursday, prompting him to intervene in the matter. Albanese framed his decision as based on a “trust” between his office and the business sector—a trust he implied the Treasurer lacked—pointing to past instances where Chalmers’ policies had been challenged or revised.

Chalmers sought to downplay claims that he had been overridden, stating that the decision to ease restrictions on credit card payments was a collective government action that preceded Albanese’s intervention. This timeline conflicted with earlier reports attributing the change directly to the Prime Minister’s demand, which Albanese appeared keen to confirm during his remarks.

The public dispute has fueled criticism from both government and opposition figures, with Liberal MP Tim Wilson accusing Albanese of repeatedly undermining and embarrassing his treasurer. The incident adds to a pattern of internal disagreements over tax policy within the government and raises questions about Chalmers’ authority ahead of parliamentary debates on the budget.

As Chalmers prepares to present the revised tax measures to parliament, the episode highlights ongoing challenges within the Labor government in balancing policy decisions, party unity, and business confidence.