Australians illegally charged billions of dollars in merchant fees by federal government

Laws will be introduced on Monday to retrospectively make these surcharges legal. However, the government will put an end to surcharges on debit card payments for services at the Australian Tax Office and Services Australia from January 1 next year.

Charges for the use of credit cards to pay for government fees and services will remain.

A joint statement from Gallagher, Treasurer Jim Chalmers and Assistant Treasurer Andrew Leigh said the new laws would “not impose any new surcharges but fix the historical issue to ensure existing surcharges are authorised by legislation”.

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“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 ATO and Services Australia to make sure these everyday payments don’t cost Australians more.”

A source with knowledge of the situation, who asked to remain anonymous to speak freely, said it would be impossible to calculate what individuals are owed.

In NSW, it is estimated every citizen in the state is owed about $30, but there are no plans for refunds. The state’s Finance Minister Courtney Houssos has blamed the state’s former Coalition government for ignoring clear advice from the crown solicitor in 2016, which stated the practice was illegal.

In October, Prime Minister Anthony Albanese announced a crackdown on excessive card surcharges, both in-store and online, providing $2.1 million in new funding for the Australian Competition and Consumer Commission (ACCC) to address excessive surcharges and improve payment fee transparency. This funding will also support the ACCC in cracking down on illegal surcharging practices and increasing public education and compliance efforts.

A spokesperson for shadow treasurer Angus Taylor said the Coalition would examine details of the legislation when it is introduced into the parliament.

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