Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill is part of a package of three bills which together will formalise longstanding Commonwealth practice by providing express, modernised and consistent legislative authority for Commonwealth entities to continue to charge and collect payment surcharges where the entity has the legislative authority to collect a payment.

Payment surcharges are commonly imposed by businesses and governments across Australia, including by Commonwealth entities. A payment surcharge is an additional amount paid by a person to cover the acceptance cost of a chosen payment method. Payment surcharges are limited to the amount it costs the merchant (including a Commonwealth entity) to accept that type of payment for that transaction under arrangements with the merchant's banking provider.

Surcharging signals to consumers the cost of their payment method and acknowledges the difference in costs across card and other payment methods. Surcharges cannot exceed merchants' 'cost of acceptance' for card payments. These price signals allow consumers to make more efficient and informed payment choices, and many consumers choose lower cost or no-cost payment options. When making payments to Commonwealth entities, consumers have a choice of how they will make that payment and information is available about whether a surcharge applies.

For example, there are several ways to make a payment to the Australian Taxation Office. Different payment methods are offered so that customers can choose a method that suits them.

A range of payment methods are offered, including electronic transfer and direct debit, as well as paying in person at Australia Post. For some payments, such as using a Visa, Mastercard or American Express card, a card payment fee will apply, but many consumers and businesses choose this payment method. They may choose these payment methods because they find them convenient or they are attracted to card benefits such as reward programs.

The package of bills does not impose new surcharges on those interacting with the Commonwealth, but instead formalises the existing practices of Commonwealth entities under a new modernised whole-of-government framework. To that end, the bills authorise the collection of surcharges by Commonwealth entities from 1 January 2003, to align with when the Reserve Bank of Australia first regulated payment surcharging as part of the then broader payments reforms.

The bill will also enable the responsible minister to make Commonwealth surcharging policies, by legislative instrument to support, moving forward, a whole-of -Commonwealth approach to surcharging, including ensuring that any surcharging is applied on a cost recovery basis only. This will also facilitate timely adoption of any changes to whole-of-government surcharging policy by Commonwealth entities.

This package of bills supports the government's broader commitment to reviewing and reforming the imposition of card payment surcharges. The government is prepared to permanently ban all surcharges on debit cards from 1 January 2026, subject to further work by the Reserve Bank of Australia and safeguards to ensure both small businesses and consumers can benefit from lower costs.

While the Reserve Bank of Australia 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 Australian Taxation Office and Services Australia from 1 January 2025.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.