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Commonwealth Entities (Payment Surcharges)

Current status

This bill became law on Dec 2nd, 2024.

Policy area

Budget, tax & economy

What does this bill do?

Australian Government bodies can add a payment surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. when they already have legal power to collect the main payment and no other law already authorises a surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. for that payment.

Why was it introduced?

Longstanding Commonwealth payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. were being charged without express legislative authority, leaving a legal gap. This bill gives government entities clear power to charge, collect and refund surcharges, and lets the minister set and enforce whole-of-government rules.

Broader context

From 1 January 2003, after the Reserve Bank began regulating payment surcharging, Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. such as the ATOA Commonwealth agency named in the background material as one of the bodies that had long charged card surcharges. and Services AustraliaA Commonwealth agency mentioned as another body that collected surcharges as part of routine payment processing. kept charging card surcharges as part of routine payment collection, but those charges had continued without clear express legislative authority. After the government announced on 15 October 2024 that it was tackling excessive surcharges and was prepared to ban debit card surcharging from 1 January 2026 following the RBAThe central bank whose payments rules and review help explain why the government changed the surcharge framework. review, this bill formalised the existing Commonwealth practice, set up whole-of-government surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules, and became law in December 2024.

Key criticism

The main concern was not about allowing surcharges in principle, but whether the bill had strong enough compliance and enforcement arrangements if government bodies breached the surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules. That reservation appears to have been raised narrowly by the opposition in the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues., which did not oppose the bill there and said its concerns were still being worked through before the SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. stage.

Who supported it?

Hon Dr Andrew Leigh MP introduced this bill. It passed on the voices.

Introduced in House 25 Nov 2024
Passed House 26 Nov 2024
Passed Senate 28 Nov 2024
Became law 02 Dec 2024

Did it become law?

Yes

Became law 02 Dec 2024

Final passage

Passed without a counted vote

Members called out ‘aye’ or ‘no’ — no individual votes were recorded.

Passage speed

7 days

From introduction to the latest recorded parliamentary step

Official record

View on APH

Parliament of Australia bill page

Meaning

What does this bill do?

  1. Australian Government bodies can add a payment surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. when they already have legal power to collect the main payment and no other law already authorises a surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. for that payment.

  2. A payment surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. means an extra amount charged to cover processing costs or because one payment method is used instead of another.

  3. The responsible minister can set whole-of-government rules for how Australian Government bodies charge, collect and refund payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another..

  4. If an Australian Government body breaks those surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules, its accountable authorityThe person or body responsible for running a Commonwealth entity and reporting to the minister if the entity breaks the surcharge rules. must tell the minister in writing as soon as practicable.

  5. The minister can then order the Australian Government body to take, or stop, specific action about the non-compliance, and the body must comply.

Show source excerpts
  1. (1) A Commonwealth entity may charge and collect a payment surcharge in relation to a payment (the base payment) if:
    Commonwealth Entities (Payment Surcharges) Act 2024 final Act text
  2. 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.
    Minister's second reading speech
  3. (3) The Minister may, by legislative instrument, determine policies (the Commonwealth payment surcharging policies) to be pursued by Commonwealth entities in relation to charging, collecting and refunding payment surcharges under sections 5 and 6.
    Commonwealth Entities (Payment Surcharges) Act 2024 final Act text
  4. (4) If the accountable authority of a Commonwealth entity becomes aware that the Commonwealth entity has failed to comply with subsection (1) of this section, the accountable authority must notify the Minister in writing of the non‑compliance as soon as practicable.
    Commonwealth Entities (Payment Surcharges) Act 2024 final Act text
  5. (5) If the accountable authority notifies the Minister under subsection (4), the Minister may, by legislative instrument, direct the Commonwealth entity to do a specified act, or to refrain from doing a specified act, in relation to the non‑compliance.
    Commonwealth Entities (Payment Surcharges) Act 2024 final Act text

Context

Broader context for this bill

From 1 January 2003, after the Reserve Bank began regulating payment surcharging, Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. such as the ATOA Commonwealth agency named in the background material as one of the bodies that had long charged card surcharges. and Services AustraliaA Commonwealth agency mentioned as another body that collected surcharges as part of routine payment processing. kept charging card surcharges as part of routine payment collection, but those charges had continued without clear express legislative authority. After the government announced on 15 October 2024 that it was tackling excessive surcharges and was prepared to ban debit card surcharging from 1 January 2026 following the RBAThe central bank whose payments rules and review help explain why the government changed the surcharge framework. review, this bill formalised the existing Commonwealth practice, set up whole-of-government surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules, and became law in December 2024.

  1. 01 Jan 2003

    Reserve Bank surcharging reforms begin

    The explanatory memorandumThe supporting document that explains what the bill does, why it was introduced and how its clauses work. says the bill applies from 1 January 2003 because that is when the RBAThe central bank whose payments rules and review help explain why the government changed the surcharge framework. first regulated payment surcharging and Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. began operating within that broader system.

    Commonwealth Entities (Payment Surcharges) explanatory memorandum ↗
  2. 15 Oct 2024

    Government announces action on excessive card surcharges

    The government said it was addressing excessive surcharges and was prepared to ban debit card surcharging from 1 January 2026, subject to consultation undertaken by the RBAThe central bank whose payments rules and review help explain why the government changed the surcharge framework..

    Commonwealth Entities (Payment Surcharges) explanatory memorandum ↗
  3. 25 Nov 2024

    Bill is introduced to formalise existing Commonwealth surcharges

    In his second reading speech, the minister said the bill would provide express, modernised and consistent authority for Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. to continue charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. where they already had power to collect the underlying payment.

    Hansard ↗
  4. 29 Nov 2024

    Parliament passes the bill

    Both houses agreed on the same text, completing passage of the package that codified current surcharging practice and enabled ministerial whole-of-government surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules.

    Parliamentary timeline ↗
  5. 02 Dec 2024

    Royal AssentThe final step that turns a bill passed by Parliament into an Act of law. makes the surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. framework law

    Royal AssentThe final step that turns a bill passed by Parliament into an Act of law. turned the bill into an Act, with the explanatory memorandumThe supporting document that explains what the bill does, why it was introduced and how its clauses work. stating the main legislation would commence the next day and retrospectively validate surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. authority from 1 January 2003.

    Parliamentary timeline ↗

Legislative route

How did it move through Parliament?

House Senate
Introduced 25 Nov 2024

The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.

Introduced and read a first time

Second reading opened 25 Nov 2024

A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.

Second reading moved

Second reading debate 26 Nov 2024

The bill reached this recorded parliamentary step.

Sent to Federation Chamber for debate 26 Nov 2024

The bill reached this recorded parliamentary step. For this bill, the Federation Chamber reported back later the same day and the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. then completed its remaining formal steps that day.

Referred to Federation Chamber

Federation Chamber debate 26 Nov 2024

The bill reached this recorded parliamentary step.

Second reading debate

HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. second reading agreed 26 Nov 2024

The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.

Second reading agreed to

Returned from Federation Chamber without amendment 26 Nov 2024

The bill reached this recorded parliamentary step. The official HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. record shows the referral out and return both happened on the same day, before the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. moved to its final formal votes.

Reported from Federation Chamber

HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. third reading agreed 26 Nov 2024

The chamber agreed to the bill at third reading, which completed passage through that chamber. Later message exchanges with the other chamber were still recorded afterwards.

Third reading agreed to

Introduced 27 Nov 2024

The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.

Introduced and read a first time

Second reading opened 27 Nov 2024

A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.

Second reading moved

SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. second reading agreed 28 Nov 2024

The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.

Second reading agreed to

SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. agreed to amendment packages 28 Nov 2024

The chamber considered amendments before the bill moved to the next stage.

Third reading agreed to :

HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. agreed to SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. amendments on rule-making limits 29 Nov 2024

The HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. dealt with SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. amendments or requests so both chambers could settle the bill in the same form. The main amendments were: The SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. agreed to two government amendments on voices, adding a non-compliance notification rule and an accountable-authority definition.

Consideration of SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. message

Passed both houses 29 Nov 2024

Both houses passed the bill in the same form, completing parliamentary passage.

Finally passed both Houses

Assent 02 Dec 2024

The Governor-General gave Royal AssentThe final step that turns a bill passed by Parliament into an Act of law., turning the bill into an Act.

Scrutiny of Bills review 05 Feb 2025

Considered by scrutiny committee (05/02/2025): SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. Standing Committee for the Scrutiny of Bills; Scrutiny Digest 1 of 2025. The committee highlighted retrospective validation of Commonwealth payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. and the effect of fast passage on parliamentary scrutiny.

Considered by scrutiny committee

APH bill page notes and Scrutiny Digest 1 of 2025

Key criticism

The main case against this bill

The main concern was not about allowing surcharges in principle, but whether the bill had strong enough compliance and enforcement arrangements if government bodies breached the surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules. That reservation appears to have been raised narrowly by the opposition in the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues., which did not oppose the bill there and said its concerns were still being worked through before the SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. stage.

No broader public case against the bill is recorded beyond these implementation concerns.

Compliance and enforcement safeguards

The clearest criticism was that the bill's compliance and enforcement settings may have needed more work, especially around how breaches of surchargeAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. rules would be handled and enforced across Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments..

Raised by Angus Taylor For The Opposition In The House Source ↗

Further sources

parlinfo.aph.gov.au ↗

Votes

Recorded votes

How the bill itself passed

The bill passed both chambers on the voices, so there is no list of individual Aye and No votes for final passage.

Passed

House passed the bill

HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.

26 Nov 2024

Passed on the voices

In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.

Passed

Senate passed the bill

SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.

28 Nov 2024

Passed on the voices

In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.

Amendments at a glance

Amendments grouped by chamber. These cards include amendment outcomes recorded without a counted division.

House

Carried

HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. accepted all SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. amendments

The HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues. agreed to the amendments made by the SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed., so the bill could pass both chambers in the same form.

Carried on voices

The chamber decided this amendment without a counted division, so there is no list of individual Aye and No votes.

Hansard record ↗

Senate

Carried

Government compliance amendments carried

The SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed. agreed on voices to two government amendments adding a non-compliance notification rule and an accountable-authority definition.

Carried on voices

The chamber decided this amendment without a counted division, so there is no list of individual Aye and No votes.

Hansard record ↗

The parliamentary record also shows 2 Government amendments agreed without a counted division.

Parliamentary debate

Who spoke, and what they said

Start here — lead voices

Sponsor speech Supports

Andrew Leigh

Australian Labor Party • MP 25 Nov 2024

Leigh supports the bill, saying it gives Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear, modern and consistent legal authority to keep charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. on a cost-recovery basis.

Read in Hansard ↗
Lead voice Supports

Jenny McAllister

Australian Labor Party • Senator 27 Nov 2024

McAllister supports the bill, saying it will give Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear, modern and consistent legal authority to continue charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. where they already have power to collect payments.

Read in Hansard ↗
Lead voice Mixed

Angus Taylor

Liberal Party • MP 26 Nov 2024

Taylor says the opposition will not oppose the bill in the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues., but wants to work with the government on compliance and enforcement issues before settling its final position in the SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed..

Read in Hansard ↗

All speeches by bloc

Labor

2 speakers · 3 contributions · 2 support

  1. Jenny McAllister ★ McAllister supports the bill, saying it will give Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear, modern and consistent legal authority to continue charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. where they already have power to collect payments.
    “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.”

    Australian Labor Party • Senator • 27 Nov 2024

    Read the full speech in Hansard ↗
  2. Andrew Leigh ★ 2 contributions Leigh supports the bill, saying it gives Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear, modern and consistent legal authority to keep charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. on a cost-recovery basis.

    Hansard records 2 separate contributions by Andrew Leigh on this bill. They are grouped here so the speaker is listed once.

    Minister's second reading speech Australian Labor Party • MP • 25 Nov 2024

    Leigh supports the bill, saying it gives Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear, modern and consistent legal authority to keep charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. on a cost-recovery basis. He argues it simply formalises existing practice and fits with the government's wider plan to reform and eventually ban debit card surcharges.

    “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.”
    Read this contribution in Hansard ↗

    Second reading speech Australian Labor Party • MP • 26 Nov 2024

    Leigh supports the bill, saying it gives Commonwealth entitiesA government body covered by this bill, including departments, agencies and other Commonwealth bodies that collect payments. clear modern authority to continue charging payment surchargesAn extra amount added to a payment to cover card processing costs or the cost of using one payment method instead of another. within a whole-of-government framework. He says it does not add new surcharges, but formalises existing practice and supports the government’s broader move toward lower card payment fees.

    “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 business and consumers can benefit from lower costs.”
    Read this contribution in Hansard ↗

Coalition

1 speaker · 1 mixed

  1. Angus Taylor ★ Taylor says the opposition will not oppose the bill in the HouseThe lower house of Parliament, where the opposition said it would not oppose the bill but wanted more work on enforcement issues., but wants to work with the government on compliance and enforcement issues before settling its final position in the SenateThe upper house of Parliament, where the bill and amendments were considered before the law was passed..
    “The opposition is concerned, therefore, that there are not appropriate incentives to ensure compliance with the surcharge policy, if and when one is made. We will work with the government on this and related issues while acknowledging the context within which this legislation was introduced. We will therefore not oppose the bill in the House and will finalise our position in the Senate based on our ongoing discussions with the government. I take this opportunity to thank the finance minister and her office for making her staff and officials are available to the opposition for a briefing and for the continued good-faith engagement with her and her office.”

    Liberal Party • MP • 26 Nov 2024

    Read the full speech in Hansard ↗

Record

Full record

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