Government Services to Cease Imposing Debit Surcharge Fees on Labor

The Albanese Labor government has revealed plans to abolish debit surcharges from the Australian Taxation Office (ATO) and Services Australia, with the goal of easing financial burdens on Australians.

Effective January 1, 2025, these surcharges, commonly added to government payments, will no longer be transferred to Australians.

This action follows the NSW government’s findings that Service NSW and Revenue NSW unlawfully collected merchant fees, prompting a federal-level task force to investigate the matter.

The Commonwealth Entities (Payment Surcharges) Bill 2024 will formalize the collection of payment surcharges by Commonwealth entities, ensuring they are legally sanctioned, both retroactively and moving forward.

The bill will be applicable retrospectively from January 2003, when the Reserve Bank of Australia (RBA) initially established and regulated surcharges.

Response from the Shadow Treasurer

Shadow Treasurer Angus Taylor stated that the Opposition would support the bill in the House but raised some concerns that need to be resolved.

“The opposition is worried that there are inadequate incentives to guarantee compliance with the surcharge policy,” he mentioned.

The Opposition will finalize their position in the Senate based on ongoing discussions with the government.

Taylor also stressed the significance of the bill, noting that it would grant the finance minister the authority to establish surcharging policies for Commonwealth entities.

This authority would ensure uniform surcharging practices while aligning with broader efforts to reduce payment fees across the economy.

Legislation to Authorize Existing Surcharges

In a statement issued by Finance Minister Katy Gallagher, the government indicated that the measure aims to clarify and standardize surcharging policies, especially for government services like those provided by the ATO and Services Australia.

“These bills will rectify the historical issue to ensure existing surcharges are authorized by legislation,” Gallagher explained.

The legislation also tackles the immediate need for changes, including ceasing the imposition of debit card surcharges on payments to these entities.

“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,” added Gallagher.

While the RBA continues its assessment of payment surcharges across the economy, the government is also gearing up to potentially permanently ban all surcharges on debit cards by 2026, contingent on the outcomes of the RBA’s review.