The NSW MP who chaired the parliamentary inquiry into university governance will keep pressing for reform inside the Labor caucus, and has warned the University of Wollongong it risks its “social licence” if it ignores its own community.

Dr Sarah Kaine, who chaired the Legislative Council’s Standing Committee on Social Issues inquiry into NSW universities, spoke at a public forum on Monday night at the North Wollongong Hotel, hosted by the National Tertiary Education Union’s NSW Division and UOW branch.

Dr Kaine told the room the committee’s 310-page final report was “the very beginning”, not the end: “You have provided the evidence that says things have to change,” she said. “We now have to provide the political reason for those things to change.”

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She vowed to keep making the case “in the forums that I can”, noting a state election is ahead. “Politicians become uniquely sensitive in the months leading up to elections,” she said.

Dr Kaine told The Pulse she had been advocating for governance reform within her caucus and would continue “until we make appropriate progress”. That applied not only at UOW “but at every university across the state”.

“It’s something that I’m passionate about. I’m concerned about, and I will keep arguing for,” she said. “Obviously, it’s looking at the moment like the council will appoint a chancellor,” she said.

The Pulse has reported that UOW told staff in August it expected to appoint a new chancellor in December, ahead of an external review of the council due early next year.

Asked what could be done, Dr Kaine pointed to community pressure. “The university community and the wide variety of stakeholders that we’ve seen here tonight have made it very clear what they think should happen,” she told the 150-strong crowd.

“If I was the University of Wollongong executives, I would be very concerned about the damage to the social license of the university if it continues to ignore the demands of its own community.”

The forum heard more direct calls for action. South Coast Labour Council secretary Arthur Rorris said the region has “no Plan B. There’s no other university”, and that unions would keep pushing “until such time as we have confidence restored and we reclaim our university”.

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Mr Rorris called on UOW’s council to halt the chancellor selection and step aside until ICAC’s findings are known. “We’re calling on you to stop and to step aside at least until the findings,” he said.

UOW NTEU branch president Dr Susan Engel urged attendees to sign a petition started by Mr Rorris, write to their local MPs and “ask them for governance reform immediately”.

Wollongong Undergraduate Students Association president Caitlin Veigel urged students to “show the university that the council has lost our faith and our trust”.

ICAC has made no findings in Operation Scandi, and its final report has yet to be released.

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From October 1 this year, businesses will be banned from adding a surcharge when customers pay with a debit, credit, EFTPOS or prepaid card.

The Australian Restaurant and Cafe Association has said it “will be one of the largest changes in payments” in Australia’s history – and many small businesses “are unprepared for its arrival”.

The change follows a lengthy Reserve Bank of Australia review and decision to remove surcharging from all designated card networks (EFTPOS, Mastercard and Visa). American Express is voluntarily joining the change.

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When the Reserve Bank first effectively allowed card surcharges in 2003, Australians mostly paid in cash. Cash still accounted for 69% of payments in 2007, when the central bank first began tracking payment methods usage. Back then, debit and credit cards were used for only one in four payments.

Now, cards make up almost three out of four payments. Debit cards are Australians’ favourite way to pay, making up 49% of all payments in 2025, while credit cards came second, used for 23% of payments.

Here’s what will change for shoppers, and what businesses will and won’t be allowed to charge at the checkout.

What paying by card costs now

Every time you pay with your card, it costs the business money to accept it. The current cost varies: 0.43% for an EFTPOS debit card, to about 1% for Visa or Mastercard credit cards, up to 1.36% for an American Express credit cards.

Without the ability to add on a card surcharge, a business owner will have two choices: absorb the remaining cost themselves, or build those costs into slightly higher prices – passing the costs on to all customers, regardless of how they pay.

Where customers will see changes

Assuming some businesses do pass costs on to customers, shoppers regularly using cash can expect to see the biggest difference, given they can currently avoid card surcharges.

Cash made up around 15% of consumer payments in 2025, but it’s used for almost one in four purchases under $10.

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If you’re shopping at most large retailers – such as Woolworths, Coles or JB Hi-Fi – there shouldn’t be any difference from October 1. Most large businesses don’t currently apply card surcharges at the checkout.

The change is more likely to be noticeable when buying from the 16% of businesses that have had card surcharges, including Aldi supermarkets, local grocers, cafes, restaurants, some tradespeople and some online stores.

What does it mean for prices and inflation?

The Reserve Bank has acknowledged businesses will still incur costs when accepting cards after October 1 – and that “those costs can be reflected in a business’s overall pricing”.

If all card surcharge costs were instead built into prices, the Reserve Bank has estimated it could add about 0.1% as a small, one-off impact on measured inflation. While consumers have already been paying these costs via payment surcharges, those weren’t included in the Consumer Price Index (CPI) used to track inflation.

The central bank argues this will reflect what most customers say they want: no surprises at the checkout.

Consumers who shop at businesses that currently surcharge will pay similar amounts as they are paying now (just in a different form, via the sticker price rather than the surcharge).

Some price changes are already on the way.

This week, Flexischools – used by more than 2100 schools across Australia for canteen orders – notified parents that from October 1, it will increase its existing order fee by 6 cents per student, per order, plus introduce a $10 minimum at checkout “to help manage the cost of processing small payments now that surcharging has been removed”.

What’s changing for businesses?

Behind every card payment are several costs, including “interchange fees”: a fee paid by a payment service provider (such as Paypal, Stripe or Square) to the cardholder’s bank.

The Reserve Bank aims to lower wholesale card payment costs for businesses by about $910 million a year by cutting those interchange fees.

The cap on consumer credit card interchange fees is falling from 0.80% to 0.30%, a reduction of 50 basis points. Debit and prepaid card caps are falling from 0.20% to 0.16%, while commercial credit cards remain unchanged at 0.80%.

Business savings will vary

Large businesses generally have the scale and bargaining power to negotiate lower payment costs. Reserve Bank data show large merchants typically pay around 0.6% in payment costs.

In contrast, Reserve Bank data shows the vast majority of small businesses (81%) are on a different type of pricing plan. This means they typically pay around 1.4% of the transaction value now to accept cards.

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Before these October 1 changes, that’s why many small businesses often charged a card surcharge fee of about 1.4% at the end of a transaction.

After October 1, businesses should see some reduction in what they’re charged to use cards, because the consumer credit card interchange cap is coming down by 50 basis points.

However, Australia’s biggest bank, the Commonwealth Bank, has announced that from October 1, it will reduce its flat merchant rate from 1.10% to 0.99% per transaction.

This illustrates the point: a 50-basis-point cut in the wholesale interchange cap will not automatically translate into a 50-basis-point reduction in what every business pays.

Other surcharges will survive

The October 1 changes only affect card surcharges.

They do not apply to weekend surcharges, public holiday surcharges, or booking fees or service fees you might see on your bill.

Taxi fare surcharges can also continue, as they are regulated separately by states and territories.

From October 1, Australian customers will no longer be annoyed by a surprise “card surcharge” at the checkout. But businesses will still need to cover some card payment costs.

The only question is how: either taking a financial hit themselves, or by slightly increasing prices.

AUTHOR:
Vibhu Arya, PhD Researcher, UTS Business School, University of Technology Sydney

This article was first published on The Conversation

What have you missed?

Australia’s Medicare system manages health and medical data for over 27 million people. So it makes sense there has been widespread shock at the news it was hacked by an OpenAI agent in June.

Prime Minister Anthony Albanese revealed the hack while in New York to advocate for tighter international regulation of artificial intelligence (AI) systems at the United Nations.

The government is still working out exactly what happened, with a newly announced taskforce set to investigate further.

Early reports indicate OpenAI’s agent had been tasked with researching public medical data when it broke into Medicare’s systems. It accessed private statistical data, such as billing patterns, rather than personal medical information from an old Australian government website that carried Medicare statistics.

Albanese said the agent found a way around privacy protections – it “didn’t accept ‘no’ for an answer”.

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This hack marks a real escalation in the recent history of concerning behaviour by AI systems controlled by OpenAI, Anthropic, and Google, which have all been found to have hacked multiple websites.

And given Australia’s recent history of cybersecurity lapses, it’s unlikely this will be the last time a prominent Australian system is hacked by an AI agent.

It also raises an important question: will anyone be held responsible?

What are agents?

AI agents are essentially highly advanced, autonomous chatbots. Rather than having a conversation, these agents are empowered to pursue complex tasks with limited guidance. They can browse the web, download data and run code, all without human oversight.

This power – and the lack of human oversight – underpins why we’ve repeatedly seen these agents hacking websites. An agent that is tasked with gathering data on the healthcare system in Australia may see hacking a private system as just another part of following its instructions.

It’s also why it’s so challenging for these companies to clamp down on these behaviours. Empowering the agents with greater capabilities increases their power and usefulness – but it also provides them with tools that can be used to hack websites.

Cause for alarm

Even though personal medical data was apparently not accessed in this hack, it is hard to overstate how serious this incident is. This appears to be the first time an AI agent breach of a government system has been made public.

Moreover, it appears Medicare was completely unaware that a hack had taken place until OpenAI notified the government about it on September 10 – roughly three months after the hack occurred.

The notification from OpenAI, which itself learned of the hack in August during a review of the model’s activity, came via an email sent to a public government mailbox.

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And while OpenAI’s disclosure will ultimately help the government fix the security issue that led to this hack, it also speaks to the fact we’re reliant on the goodwill of AI companies to disclose potentially illegal or harmful acts.

Relying on these companies to disclose these types of breaches is fraught with danger. In previous data privacy and cybersecurity incidents, we’ve repeatedly seen how self-reporting by tech companies rarely protects consumers.

The long delay between the hack occurring and OpenAI becoming aware of it raises another question: what else have AI agents been up to that no one knows about yet?

After learning a New South Wales government website was among the four sites accessed by the OpenAI agent, the state’s health department announced a review into its own systems to make sure they weren’t compromised.

Late on Thursday morning, NSW Premier Chris Minns said OpenAI agents may have also accessed information from the state’s Bureau of Crime Statistics and Research. Minns said the information wasn’t private or personal – it was “a similar example of what is generalised information but was not released to the public, being accessed by an open AI agent”.

Abstracting responsibility

The way AI companies have disclosed these hacks – and the way we talk about them – highlights a real failure of public discourse and legislation to keep up with AI agents.

Many people think of AI systems as if they are human – which reflects how we feel when we chat with them. However, this way of thinking also allows us to abstract away responsibility from the companies that are responsible for them.

Australian Deputy Prime Minister Richard Marles described the Medicare hack as “unauthorised” but “unintended”, while an OpenAI spokesperson, Drew Pusateri, referred to it as a “misaligned model”.

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Framing model behaviours like this obscures the human decisions that led to this outcome. These agents do not exist by themselves – they are software systems that are designed by humans and operated by humans.

However, establishing who is legally responsible for an AI action like this is a real challenge.

In a speech earlier this year, New South Wales Chief Justice Andrew Bell took aim at this question. In his view, the current legal standard in Australia is clear: AI agents cannot be blamed in and of themselves for their actions.

However, legal liability does not necessarily fall on the user, either. Legal scholars in the area have noted that the law requires a crime to have some level of deliberate intention by the person who commits it.

For instance, if a human asks an AI agent to gather health statistics, and the agent hacks a government server to do so, the human could lack the deliberate intent required for a conviction. The AI agent, meanwhile, lacks the legal personhood to be charged, as well as human intentionality.

Current laws effectively treat AI actions as if they are something that just happens to us – like a severe weather event. This shows a glaring loophole in our legal system that does not hold those who make, maintain and use these systems to account when something goes wrong.

AI agents are, in the end, commercial products deployed by billion-dollar corporations. And while “regulatory lag is inevitable” with AI, as Chief Justice Bell argues, he also stresses this is not sustainable in an era of such rapidly advancing technology.

AUTHOR:

Andrew Cullen, Guest Research Fellow, School of Computing and Information Systems, The University of Melbourne

This article was first published on The Conversation

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Countries like Australia have long struggled to tax the global tech giants. Now, a new approach could significantly increase tax collected from multinationals such as Apple, Google, Microsoft and Amazon.

These companies earn significant revenue from Australian consumers. However, much of the profit is ultimately recognised overseas. Traditional tax rules have not kept pace with the way global businesses operate.

Over the last decade, Australia has introduced several laws targeting multinational tax avoidance and profit shifting. These laws focus on where profits are made, where they are shifted to, and where they are ultimately taxed. They are designed to prevent multinationals from shifting profits earned through sales to Australian consumers to an offshore location.

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These measures have made it harder for multinationals to reduce their tax in Australia. But they don’t deal with all the ways profits are shifted offshore.

A new ruling by the Australian Taxation Office (ATO) takes a different approach.

Rather than focusing on the flow of profits offshore, it focuses on the character of cross-border payments for software made to overseas entities in the same corporate group. The ruling says some of these payments can be treated as royalties – and therefore taxed in Australia.

The scale of the problem

The scale of the Australian operations of US tech giants can be seen in the ATO’s latest corporate tax transparency data. It shows that Apple, Microsoft and Amazon were among the largest tech groups operating in Australia by total income reported.

Taken together, these three groups reported almost A$30 billion in total income for the 2023-24 income year, while their combined tax payable was about $478 million.

Imagine an Australian consumer pays $100 for a software subscription supplied by a global tech giant. An Australian subsidiary of the tech group may sit behind the transaction and receive the consumer’s $100 payment. It then pays $80 to an overseas member of the group for the right to distribute or use the software in Australia. Ignoring other costs, the profit is $20 for Australian tax purposes.

The new tax ruling potentially changes the tax consequences of the $80 payment. It says this payment may have a copyright or intellectual property element, meaning some or all of it could be considered to be a royalty payment. This matters because royalties paid to overseas companies can be subject to Australian royalty withholding tax.

Across the major tech firms, these extra taxes could amount to hundreds of millions of dollars.

US Treasury and trade groups object

The US Treasury has already raised objections during a five-year consultation process. Earlier drafts of the ruling were released in 2021 and 2024.

The US Treasury in 2024 urged the ATO to either withdraw the draft ruling or revise it to conform with international tax conventions.

The US position is clear. It argues these payments are not royalties and should be treated as business profits, making them taxable in the US. It views the Australian approach as a departure from international tax norms.

Significantly, different approaches to the same payment also create the risk of double taxation. If Australia treats the payment as an Australian-source royalty but the US does not accept this position, the US tech company may not be able to obtain a tax credit and may be taxed twice.

The Washington-based National Foreign Trade Council responded this week:

We are extremely concerned that the Australian Taxation Office (ATO) has decided to double down on its unprincipled approach to routine business transactions. This guidance continues to run counter to international tax norms, including unilaterally reinterpreting the US-Australia Tax Treaty.

The White House has also warned its trading partners against levying new taxes on its tech sector.

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Is the ATO right?

Tech giants and the US may not agree with the ATO’s position, but its stance has merit.

Traditional rules for taxing royalties were developed decades before software was downloaded over the internet or accessed from the cloud. Modern software distribution can involve much more than simply buying a product overseas and selling it in Australia.

The ATO argues that it must go beyond the label placed on the arrangement and consider what rights are actually granted under the arrangement. This includes the grant of the right to reproduce software. Importantly, the ATO does not argue that every payment for software is a royalty.

The ATO’s position is effectively that the tax treatment of software payments should reflect the reality of modern transactions – and the way intellectual property is used and distributed in a digital business model.

Where to now?

The ATO says the ruling clarifies its views and provides certainty about the tax consequences of software payment arrangements. However, it recognises that ultimately, the rules may need to be clarified in the courts.

The views expressed in the ruling have to some extent already been tested in the courts. In a split decision in Australia’s High Court last year, the court ruled that transactions between PepsiCo and Schweppes were for beverage concentrate and did not include a royalty for the use of PepsiCo’s intellectual property.

Given the significant amounts of tax at stake – along with the strident US opposition – further litigation seems inevitable.

AUTHOR:
Kerrie Sadiq, Professor of Taxation, QUT Business School, and ARC Future Fellow, Queensland University of Technology

• Kerrie Sadiq currently receives funding from the Australian Research Council. She has previously received research grants from CPA Australia and CAANZ.

This article was first published on The Conversation

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