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Billion dollar Mishappening with Australians – You should know!

Did you know you’ve been paying billions in illegal fees for government services? This has been happening for over 20 years. Fees were added to services like passport renewals and tax bills when you used debit cards.

The problem started under the John Howard government. It was first found in New South Wales, where $144 million in illegal fees were collected. A taskforce was formed to look into how widespread this issue is at the federal level.

Major Highlights

  • Australians have been illegally charged billions in merchant fees for government services over 20 years
  • The issue was first uncovered in New South Wales, where $144 million was collected in illegal fees
  • A federal taskforce was established to investigate the extent of the problem nationwide
  • The Australian Taxation Office charges a 0.4% merchant fee for Visa debit cards and 0.2% for Mastercard debit cards
  • The government has allocated $2.1 million to the ACCC to combat excessive and illegal surcharging practices

Historical Background of Illegal Government Surcharges

The roots of the government’s illegal merchant fees go back to the Howard government era, nearly two decades ago. Recent discoveries have shown the wide scope of these unlawful charges. They shed light on the federal government’s questionable practices.

NSW Government Precedent Case

In October, an investigation by the New South Wales government found 92 million transactions. These transactions had built up $144 million in illegal merchant fees from 2016. This case made the federal government look into its own payment systems.

They found similar credit card fees and interchange fees from the Howard government era.

Scope of Federal Transaction Charges

The investigation showed the Australian Taxation Office charged a 0.4% acquirer fee for Visa debit card payments. They also charged a 0.2% fee for Mastercard debit card transactions. Legal advice to Finance Minister Katy Gallagher confirmed that laws ban the government from collecting payment surcharges for taxes or fees.

Payment TypeTypical Merchant Costs
Eftpos TransactionsLess than 0.5%
Visa and Mastercard Debit0.5% to 1%
Visa and Mastercard Credit1% to 1.5%

These findings highlight the need for more transparency and accountability in the government’s payment practices. It’s important to follow laws and regulations.

“Merchants have the right to impose a cost-based surcharge on card payments, limited to the amount it costs the merchant to accept that type of card for that transaction.”

Government Response and Legislative Changes

The Albanese administration is taking action after finding out Australians were charged billions in illegal fees. They are introducing new laws to fix this big problem. These laws will make it legal for these fees to be charged, solving the issue once and for all.

New Legislation Introduction

Finance Minister Katy Gallagher, Treasurer Jim Chalmers, and Assistant Treasurer Andrew Leigh have spoken out. They say the new laws won’t add extra fees but will solve the long-standing issue. The government wants to be open and fair in its financial dealings with everyone.

Changes to Debit Card Charges

The government has made a big change. From January 1, 2025, there will be no extra fees for debit card payments at the Tax Office and Services Australia. But, credit card fees will stay, as the government keeps looking into payment fees and practices.

Future Implementation Timeline

The new laws aim to solve past problems, but there’s no set time for refunds yet. Auditing small charges over the years is a big task. The main goal is to make sure this doesn’t happen again in the future.

FAQ

What is the issue with merchant fees being charged on government transactions in Australia?

For over 20 years, Australians have been charged billions in illegal fees for government services. This includes fees for passport renewals, visa applications, and tax bills when using debit cards.

When did this issue originate?

The problem started during the John Howard government era and lasted for two decades.

How much was charged illegally in New South Wales?

In NSW, the government collected 4 million illegally over eight years.

What rates were being charged by the Australian Taxation Office?

The Australian Taxation Office charged a 0.4% fee for Visa debit cards and 0.2% for Mastercard debit cards.

What is the government’s response to this issue?

The Albanese government is taking action. New laws will make these fees legal. But, from January 1, 2025, debit card fees will stop at the Tax Office and Services Australia. Credit card fees will stay.

Will individuals be refunded for the illegal fees?

There are no plans to refund individuals. It’s hard to track small fees over many years.

Lenore Taylor is a prominent Australian journalist and current editor of Above the law INC. Her distinguished career spans three decades, earning prestigious accolades including the Walkley Award (2003), Graham Perkin Journalist of the Year (2007), and UN Environmental Journalism Award (2009). She's renowned for her political and environmental reporting.

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