Senator the Hon Katy Gallagher

The Albanese Labor Government will stop passing on debit surcharges from the ATO and Services Australia to make sure these everyday payments don’t cost Australians more from 1 January 2025.

Following the New South Wales Government’s announcement on 23 October 2024 that Service NSW and Revenue NSW had unlawfully collected merchant fee charges, we established a multi-agency Taskforce to examine the issue at a federal level.

As a result, we received advice that the collection by a Commonwealth entity of a payment surcharge is likely unlawful in certain circumstances without a legislative basis to permit it.

Next week, the Government will introduce the Commonwealth Entities (Payment Surcharges) Bill 2024 and related Bills.

This new legislation will provide the finance minister with the power to quickly and efficiently amend Commonwealth surcharging policies, including to stop Commonwealth agencies passing on debit card surcharges.

These Bills will not impose any new surcharges but fix the historical issue to ensure existing surcharges are authorised by legislation.

While the Reserve Bank of Australia (RBA) completes its important work on the Surcharging Review and how payment fees can be reduced economy-wide, we will stop passing on debit surcharges from the ATO and Services Australia to make sure these everyday payments don’t cost Australians more.

The practical benefit to Australians is that they will save money because they won’t be charged a fee simply to use their debit card.

As previously announced, the Government is prepared to permanently ban all surcharges on debit cards from 2026, subject to the RBA’s Surcharging Review and safeguards to ensure both small businesses and consumers can benefit from lower costs.

The legislation will apply retrospectively from 1 January 2003 providing certainty and formalising longstanding practice, which has ensured the significant costs of using particular payment methods are not borne by taxpayers.

This aligns with when the RBA first regulated payment surcharging.