Over the past two decades, Australians have unknowingly paid billions of dollars in illegal merchant fees for federal government services.
These charges, levied for using credit and debit cards to pay for essential services such as passports, visa applications, and tax bills, were brought to light in a report by Nine Newspapers.
The revelation has sparked widespread concern, leading to a comprehensive review by the Albanese government into federal payment systems.
The issue gained prominence after the New South Wales (NSW) government uncovered that 92 million transactions since 2016 had accrued $144 million in illegal merchant fees.
This discovery prompted the federal government to assess the extent of overcharging at a national level, revealing a systemic problem that spans decades and impacts millions of Australians.
Merchant fees are charges businesses incur when processing card payments. While such fees are permissible in private transactions, the imposition of these charges on payments for government services violates Australian regulations.
The federal government, responsible for facilitating equitable access to essential services, has faced scrutiny for allowing such practices to persist.
Finance Minister Katy Gallagher announced that the Albanese government would introduce legislation to eliminate debit surcharges from the ATO and Services Australia starting January 1.
“This new legislation will grant the finance minister the authority to swiftly and effectively update Commonwealth surcharging policies, including preventing Commonwealth agencies from passing on debit card surcharges,” she stated.
“These Bills won’t introduce any new surcharges but will address the historical issue by ensuring that existing surcharges are properly authorised by law.”
Australians will benefit practically by saving money, as they will no longer be charged fees for using their debit cards.
According to legal advice provided to Finance Minister Katy Gallagher, as reported by Nine, Commonwealth laws prohibit the government from imposing payment surcharges on tax or fee payments.
