This bill became law on Dec 2nd, 2024.
Budget, tax & economy
Australian Government agencies can charge payment surcharges on payments they already have legal power to collect, including for payments made since 1 January 2003.
Longstanding Commonwealth payment surcharges were being charged without express legislative authority, leaving a legal gap for agencies that already collect payments. This bill responds by imposing an equal tax where needed so past surcharges can keep operating under the new framework.
After the Reserve Bank began regulating payment surcharges in 2003, Commonwealth entities such as the ATO and Services Australia kept charging card surcharges on payments they were already authorised to collect, but over time it became clear those charges did not always rest on express legislative authority. Following the government's 15 October 2024 announcement on excessive surcharges and foreshadowed debit card surcharging reforms, this bill formed part of a package to lock in a consistent legal basis for existing Commonwealth surcharges, impose an equivalent tax where needed for past collections, and then took effect after Parliament passed it and Royal AssentThe formal approval that turns a bill passed by Parliament into an Act. was given.
The main criticism was that the bill's surcharge rules may not create strong enough incentives for Commonwealth entities to comply properly, making the framework too weak on enforcement rather than wrong in principle. This concern was raised conditionally by the Coalition in the House, which did not oppose the bill there and said its final Senate position would depend on further talks with the government.
Hon Dr Andrew Leigh MP introduced this bill. It passed on the voices.
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
Meaning
Australian Government agencies can charge payment surcharges on payments they already have legal power to collect, including for payments made since 1 January 2003.
The responsible minister can set whole-of-government rulesA single rule set the minister can make so Commonwealth agencies charge, collect and refund surcharges in a consistent way. for charging, collecting and refunding surcharges, including transparency requirements about how agencies apply them.
If another Commonwealth, state or territory law already lets a Commonwealth agencyThe government body charging or collecting the payment surcharge, including agencies and other Commonwealth bodies covered by the PGPA Act. charge a surcharge on a payment, this new framework does not add a second surcharge power.
If a past surcharge turns out not to be valid under the new framework, the law imposes an equal tax and offsets it against any amount the person would otherwise be repaid.
Where Commonwealth entities have the power, function, or duty to collect a payment (a base payment) under the law of the Commonwealth, a State, or a Territory, they may charge and collect a payment surcharge in relation to that base payment. This applies prospectively and retrospectively from 1 January 2003.Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum
The Minister may, by legislative instrument, make Commonwealth surcharging payment policies relating to the charging, collecting and refunding of payment surcharges. It is expected that the Minister will consult relevant ministers and agencies in developing such policies. Policies will likely include requirements for Commonwealth entities to publish details regarding their surcharging practices, including considerations for the issuing of refunds. This will ensure transparency of surcharging practices across all Commonwealth entities.Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum
Where a base payment is already a surchargeable payment under a Commonwealth, a State, or a Territory law, the Commonwealth entity is not entitled to charge and collect a payment surcharge under the new legislation. This would avoid the potential for the legislation to inadvertently affect existing legislation that deals with the collection of payment surcharges. This ensures the Parliament can readily set and retain special rules for payment surcharging in relation to certain payments in special circumstances.Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum
Where the Commonwealth or a Commonwealth entity would be liable to pay a person an amount as a result the person paying or purportedly paying an amount which a Commonwealth entity charged or purportedly charged as payment surcharge in relation to a base payment which was not a surchargeable payment, that person is liable to pay a payment surcharge tax. The Commonwealth or Commonwealth entity must set off the amount of payment surcharge tax that the person is liable to pay against the liability owed to that person.Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum
Context
After the Reserve Bank began regulating payment surcharges in 2003, Commonwealth entities such as the ATO and Services Australia kept charging card surcharges on payments they were already authorised to collect, but over time it became clear those charges did not always rest on express legislative authority. Following the government's 15 October 2024 announcement on excessive surcharges and foreshadowed debit card surcharging reforms, this bill formed part of a package to lock in a consistent legal basis for existing Commonwealth surcharges, impose an equivalent tax where needed for past collections, and then took effect after Parliament passed it and Royal AssentThe formal approval that turns a bill passed by Parliament into an Act. was given.
Reserve Bank regulation begins and Commonwealth surcharges start being used
The explanatory memorandum says the retrospective framework starts on 1 January 2003, when the RBAThe central bank that regulates payment surcharges in the broader payments system and whose review is part of the policy background to this bill. first regulated payment surcharging and Commonwealth entities began using surcharges on some payment methods.
Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum ↗Government announces action on excessive surcharges
The explanatory memorandum says the government announced it was addressing excessive surcharges and was prepared to ban debit card surcharging from 1 January 2026 after the RBAThe central bank that regulates payment surcharges in the broader payments system and whose review is part of the policy background to this bill.'s review.
Commonwealth Entities (Payment Surcharges) Tax (Imposition) explanatory memorandum ↗Government introduces a bill package to formalise Commonwealth surcharges
In introducing the bill, the minister said the package would provide express and consistent legislative authority for Commonwealth entities to keep charging surcharges and would impose equivalent tax where past collections may have exceeded Commonwealth non-tax powers.
Hansard ↗Parliament passes the bill
Both houses passed the bill in the same form, completing the legislative response to the authority gap around longstanding Commonwealth payment surcharges.
Parliamentary timeline ↗Royal AssentThe formal approval that turns a bill passed by Parliament into an Act. completes the new surcharge framework
Royal AssentThe formal approval that turns a bill passed by Parliament into an Act. turned the bill into an Act, with the explanatory memorandum stating that it commenced the day after assent.
Parliamentary timeline ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step. For this bill, the Federation Chamber reported back later the same day and the House then completed its remaining formal steps that day.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
Second reading debate
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
The bill reached this recorded parliamentary step. The official House record shows the referral out and return both happened on the same day, before the House moved to its final formal votes.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
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
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe formal approval that turns a bill passed by Parliament into an Act., turning the bill into an Act.
Considered by scrutiny committee (05/02/2025): Senate Standing Committee for the Scrutiny of Bills; Scrutiny Digest 1 of 2025. The committee highlighted the retrospective surcharge package and the effect of fast passage on parliamentary scrutiny.
Considered by scrutiny committee
APH bill page notes and Scrutiny Digest 1 of 2025Key criticism
The main criticism was that the bill's surcharge rules may not create strong enough incentives for Commonwealth entities to comply properly, making the framework too weak on enforcement rather than wrong in principle. This concern was raised conditionally by the Coalition in the House, which did not oppose the bill there and said its final Senate position would depend on further talks with the government.
Recorded criticism was limited and focused on compliance settings, not the bill's overall aim.
Weak compliance incentives
The strongest recorded reservation was that the surcharge framework may not put enough pressure on Commonwealth entities to follow the rules properly, suggesting the bill needed stronger compliance incentives or enforcement settings.
Further sources
Votes
The bill passed both chambers on the voices, so there is no list of individual Aye and No votes for final passage.
House 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.
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.
Senate 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.
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.
Parliamentary debate
Start here — lead voices
Leigh supports the bill as part of a broader package that will give Commonwealth entities clear, modernised authority to keep charging payment surcharges.
Read in Hansard ↗McAllister supports the bill, saying it formalises the Commonwealth's existing practice on payment surcharges in a modern whole-of-government framework.
Read in Hansard ↗Taylor says the opposition will not oppose the bill in the House, but it is concerned the surcharge rules do not create strong enough incentives for compliance and will decide its final position in the Senate after further discussions with the government.
Read in Hansard ↗All speeches by bloc
2 speakers · 3 contributions · 2 support
“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 the full speech in Hansard ↗
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
Leigh supports the bill as part of a broader package that will give Commonwealth entities clear, modernised authority to keep charging payment surcharges. He says it is needed to formalise longstanding practice and validate past collections where the Commonwealth's non-tax powers were not enough.
“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
Leigh supports the bill and the wider package, saying it simply formalises long-standing Commonwealth surcharge practices under a modern whole-of-government framework. He says it also fits the government's broader plan to review payment surcharges, including moving toward banning debit card surcharges.
“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 ↗
1 speaker · 1 mixed
“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.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe formal approval that turns a bill passed by Parliament into an Act., turning the bill into an Act.
Senate Standing Committee for the Scrutiny of Bills
Considered by scrutiny committee
Considered by scrutiny committee (5 Feb 2025): Senate Standing Committee for the Scrutiny of Bills; Scrutiny Digest 1 of 2025. The committee highlighted the retrospective surcharge package and the effect of fast passage on parliamentary scrutiny.
APH bill page notes and Scrutiny Digest 1 of 2025
