Small businesses are still figuring out ways to deal with the ban on credit card surcharges that took effect on October 1 and are searching for ways to manage the costs.

While the ban is forecast to save consumers A$1.6 billion a year in surcharge fees, businesses continue to incur the card processing costs charged by the banks.

In response, some businesses have decided to offer discounts for payments in cash. This could lead to an increase in cash usage after years of decline – and brings with it risks of an expanded shadow economy and greater opportunities for businesses to underreport sales and evade tax obligations.

The shadow economy

Australian Taxation Office (ATO) data show that net goods and services tax (GST) collected from cafes, restaurants and takeaway food services reached $4.36 billion in the 2024–25 financial year. This highlights the contribution of the hospitality sector to the economy. Even a small proportion of unreported sales could result in significant losses in GST revenue.

The Reserve Bank of Australia (RBA) shows that increased use of cash is driven by the shadow economy, which refers to undeclared economic activity, which is not reported or taxed.

While difficult to measure, official estimates put the size of the shadow economy at about 3% of Australia’s gross domestic product, or equivalent to $80 billion in 2025.

The peak accounting body, CPA Australia, has estimated undeclared income in the shadow economy created a net gap of $11 billion annually in missing taxes. Federal Treasury says the undeclared sales and undeclared wages are the critical components of the shadow economy.

Tax evasion is harder with card payments

Over time, the use of cash in Australia has declined significantly, while credit and debit card usage has surged. RBA data show cash payments fell from 69% of consumer transactions in 2007 to 15% in 2025. Use of card payments increased over that time from 26% to 73%.

Among the biggest declines in cash use were for dining out and takeaway food, and transport, reflecting the increased use of card payments and digital payment methods.

However, the ban on card surcharges could unintentionally reverse this trend.

Unlike electronic payments, cash transactions lack independently verifiable digital records. This creates opportunities for businesses to underreport sales and potentially evade taxes.

European evidence shows that greater card payments hinder tax evasion because they build a trail for the underlying transactions, while cash transactions are associated with higher tax evasion.

A separate EU study shows greater use of card payments is associated with higher tax revenue.

These findings do not establish that Australia’s ban on surcharges will increase tax evasion. However, they highlight the potential risk that could increase tax evasion arising from the ban.

Banks could take the hit

Following the ban on card surcharges, policymakers should consider measures to curb the shadow economy and reduce tax evasion.

First, banks and credit card companies could sharply reduce card processing fees. This would reduce costs for businesses and encourage businesses to accept more card payments. Evidence from academic research shows that the volume of card transactions increases when the card processing fees are reduced.

Even some government ministers, including frontbencher Kristy McBain, have suggested banks and credit card companies should absorb some of the card processing fees.

Second, improving how businesses record their sales electronically generally boosts tax compliance and reduces tax evasion by making income easier for the ATO to check. Digital records allow tax authorities to verify transactions and enforce tax obligations more effectively.

The tax office already collects information from a wide range of third-party sources, both public and private. These reports allow tax authorities to verify income and transactions, which makes it harder for businesses to underreport their sales and income.

Broader economic consequences

Businesses that understate their takings create unfair competition by undercutting businesses that comply with their tax obligations.

The potential consequences of the ban on card surcharges also extend beyond individual businesses. Any increase in unreported cash transactions could reduce government tax revenue.

And as the tax office has noted, reduced tax revenue undermines the funding of essential public services such as healthcare, education and infrastructure.

The ban on surcharges is an important measure to protect consumers from additional charges. However, policymakers should also consider the potential consequences for the broader economy. In particular, the ban could increase the risk of expanding the shadow economy and creating greater opportunities for tax evasion.

Md Akhtaruzzaman, Professor of Finance and Head of Discipline, Accounting and Finance, Australian Catholic University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The first novel written and published in Australia is a multifaceted work of autobiographical and historical significance, a convict narrative and, arguably, Australia’s first work of crime fiction.

It’s a cautionary tale about the virtues of moderation, discipline, prudence and humility and the dangers of ambition and self-centred wilfulness. And it offers the English reader (for whom it was intended), a topsy-turvy world where social hierarchies are overturned and the lines between crime and corruption – and the system administering justice – are blurry.

Quintus Servinton: A Tale Founded upon Incidents of Real Occurrence was printed in Hobart Town, in the then penal colony of Van Diemen’s Land, in three volumes, between 1830 and 1831.

The novel purports to be a fictionalised biography, written by an unnamed author narrator, who meets the 60-year-old subject, Quintus, when he is convalescing at the home of the Serviton family in Devonshire.

Quintus Servinton gives this third-person narrator a manuscript, which follows the eponymous hero’s journey from his birth in 1772 through childhood, education and marriage, before his turn to crime and subsequent downfall.

Of course, storytelling in Australia has a much longer history. First Nations peoples have been sharing stories for millennia. But the novel form, as its name suggests, with its realism and psychological depth, was still considered quite new at the time of the colonisation here in the 18th century. It arose in Britain with the rise of the middle class, expanding literacy and new technologies of printing.

While Quintus Serviton has been republished multiple times and the subject of much scholarly discussion, less well known is that the first novel published on the Australian mainland was written and published in Sydney by an Irish-born woman in 1838.

Titled The Guardian: A Tale by an Australian, the author of the novel remained unknown until the 1960s, when she was revealed to be Anna Maria Bunn (1808-1889), a young Irish widow. A note in the library of the Bunns’ property, written by her son, William, stated: “Mother was the author of The Guardian”.

A riches to rags tale

In Quintus Servinton, our protagonist shows early signs of promise but the temptations of crime – his “species of perversion” – are too alluring. He falls into trouble when he signs fictitious bills of exchange to obtain credit for his failing business ventures, linked to sugar and slavery in the West Indies.

He tries to flee to America but is captured, tried and sentenced to death for forgery. The sentence is commuted to transportation to New South Wales in 1805 where, in spite of clashes with colonial officials, he attempts to conduct himself as a model prisoner.

The novel Quintus Servinton was initially published anonymously but the author was readily identified as Henry Savery. Savery, an English businessman and the son of a prominent banker, had been transported to Van Diemen’s Land for forgery (although he was sentenced in 1824, decades later than his fictional counterpart). Like Quintus, he overreached financially and forged fictitious bills to meet his debts.

On learning that forgery was a capital offence and panicking at the prospect of detection, Savery had fled England, planning to escape to America. He was captured in the Isle of Wight, pleading guilty and condemned to death. Reprieved at the last moment, he arrived in Hobart in 1825.

After his release from prison, Savery underwent periods of assignment until securing his ticket-of-leave in 1832; it was temporarily withdrawn in 1833. He secured a conditional pardon in 1838, but again overreached himself financially, resorting again to forgery. He was sent to Port Arthur, where he died in 1842.

On top of the different time-frames, there are other differences between fiction and reality. In the novel, fiction offers more redemption than Savery’s life was able to. Quintus’s idealised wife Emily remains faithful to her husband and eventually secures his release before they return to Devonshire.

For modern readers, and I suspect even for Victorian ones, the writing in this novel is too flowery. It opens, for example, with a long sentence (quoted here only in part):

Which of my readers chances to be acquainted with the beautiful scenery of the South of Devonshire? and which, being so acquainted, recollects where the Dart, gliding its limpid way between Dartmouth and Totness, waters a range of fertile meadows […]

Still, it told an unique riches to rags tale of life in servitude in a new colony. Quintus Servinton was intended for sale in England, where it was reissued in London in 1832. Only a few copies were reserved to be sold in Tasmania and, of these, only three are known to survive. (Fortunately, you can read the work online for yourself here).

The novel was a minor sensation in England. The Literary Gazette called it a “literary curiosity”. The Bath Review found it “a favourable specimen of Van Diemen’s Land literature, and an equally favourable specimen of Hobart Town typography”.

One reviewer, however, was “more attracted by the quality of the paper […] than by the woes and wonders of the story itself.”

The Guardian: a gothic tale

Anna Maria Bunn, author of The Guardian, had emigrated to the colony of New South Wales with her family, where her father served as a member of the British Army.

In 1828, she married George Bunn, an English sea captain. He died unexpectedly in 1834, leaving her in debt with two young sons. The Guardian, published when she was 30 by the colonial printer and publisher James Spilbury is, as far as we know, her only work. It is not known how many copies of the novel were printed or sold.

In later years, she lived on a property near Braidwood, just outside what is now Canberra, helping her son William manage the property, while gardening and painting. She died in 1889 and is buried in Braidwood cemetery.

Set entirely outside Australia, in Britain and the European continent, The Guardian is a gothic fiction of obsessive love, rape, incest and suicide, with melodrama and social satire thrown in. The novel focuses on two young women whose friendship is maintained through letters. The plot unfolds when a mistaken rumour leads one of the protagonists into a disastrous incestuous marriage to her half-brother, which leads to a series of tragic suicides.

Perhaps some of the novel’s imagery of the horrors of both the ocean and the fearful distances it creates speaks to the colonial condition in which Bunn was writing. And its cutting across class and sectarian lines resonates with the new social conditions in which she found herself.

In 1991 the novel was reprinted with an introduction by Australian literary scholar Elizabeth Webby, who did so much to retrieve early colonial fiction, particularly that written by women. More recently, scholar Elizabeth Malcolm has provided an overdue assessment of Bunn’s life and work, arguing that the while the novel may not have significant merit, it does shine light on the early colonial experiences of Irish-Catholic, middle-class women.

Overwritten and overwrought

Neither novel has stood the test of time from a literary perspective: Quintus Serviton is overwritten and moralising; The Guardian is overwrought and the story too melodramatic. But they do tell us about Australia literary history and its emergent generic conventions.

Savery’s novel explores forgery, authenticity and feminine respectability; Bunn’s concerns gossip, illegitimacy and misunderstanding as well as class and sectarian conflicts, all of which have been central themes across Australian literary culture.

These novels remind us that what we call “Australian literature” has always been global literature connected to the world and preoccupied with the experience of migration. It has been fundamental to both the Australian novel and Australian culture, even if that is something some descendants of these migrants would prefer to forget.

Maggie Nolan, Director of AustLit, Associate Professor in Digital Cultural Heritage, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.