Commonwealth Entities (Payment Surcharges) (Consequential Provisions and Other Matters) Bill 2024 - Initial Scrutiny [2025] AUSStaCSBSD 2 (5 February 2025)

1.1 The committee comments on the following bills and, in some instances, seeks a response or further information from the relevant minister.

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Commonwealth Entities (Payment Surcharges) (Consequential Provisions and Other Matters) Bill 2024^[2]

Purpose	The Commonwealth Entities (Payment Surcharges) (Consequential Provisions and Other Matters) Bill 2024 made relevant consequential amendments and retrospectively applies the legislative authority to charge and collect payment surcharges to payments made on or after 1 January 2003.
Portfolio	Treasury
Introduced	House of Representatives on 25 November 2024
Bill status	Received Royal Assent on 2 December 2024

Retrospective validation^[3]

1.2 This bill (now Act) provides that at any time on or after 1 January 2003, Commonwealth entities are taken to have always been authorised to charge and collect payment surcharges.^[4] This therefore retrospectively validates these payments.

1.3 The committee has a long-standing scrutiny concern about provisions that have the effect of applying retrospectively, as it challenges a basic value of the rule of law that, in general, laws should only operate prospectively. This is on the basis that a core concept of the rule of law is that all government action be authorised by law. A corollary of this is that people are entitled to have the legality of any governmental interference with their rights and obligations determined by reference to the legality of government action at the time they allege their rights have been adversely affected. The committee has a particular concern if the legislation will, or might, have a detrimental effect on individuals.

1.4 Generally, where proposed legislation will have a retrospective effect, the committee expects the explanatory materials should set out the reasons why retrospectivity is sought, whether any persons are likely to be adversely affected, and the extent to which their interests are likely to be affected. In relation to the retrospective validation provisions the explanatory memorandum notes:

The Consequential and Other Matters Bill applies to payment surcharges charged and collected on or after 1 January 2003. This provides legislative certainty in relation to surcharges imposed from when the RBA first regulated payment surcharging. As this maintains the ongoing approach to surcharging by Commonwealth entities, and noting the amount of any surcharge previously paid by any individual is likely to have been minor, this is not likely to materially disadvantage any person.

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.^[5]

1.5 The committee acknowledges that this measure is unlikely to materially disadvantage any person as any surcharge paid previously is likely to have been minor. However, the committee draws attention to the fact that these payments have been charged and collected since January 1, 2003, without proper legislative basis.

1.6 Noting that this bill has now passed both Houses of Parliament, the committee makes no further comment in relation to this matter.

Parliamentary scrutiny^[6]

1.7 The committee notes with concern, from a scrutiny perspective, the speed with which this bill has passed both Houses of Parliament. The bill was introduced in the House of Representatives on 25 November 2024 and passed both Houses on 28 November 2024.

1.8 The committee notes that the timeline for the passage of the bill diminishes the ability of this committee to undertake its usual scrutiny process, including to engage in meaningful dialogue with the executive to address any concerns. The committee also notes that the standing orders of both houses of the Parliament with respect to legislation are designed to provide members of the Parliament with sufficient time to consider and reconsider the proposals contained in bills. The committee is of the view that truncated parliamentary processes by their nature limit parliamentary scrutiny and debate.

1.9 The committee notes with concern the speed at which this bill has passed the Parliament. While the procedure to be followed in the passage of legislation is ultimately a matter for each house of the Parliament, the committee reiterates its consistent scrutiny view that legislation, particularly where it may trespass on personal rights and liberties, should be subject to thorough parliamentary scrutiny.

^[3] Schedule 2, items 2 and 3. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).

^[4] Payment surcharges are commonly imposed by businesses and governments across Australia, including by Commonwealth entities. A surcharge is an additional amount paid by a person when using certain payment methods to pay an underlying amount (e.g. for use of debit cards). 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. See explanatory memorandum, p. 4.

^[6] Schedule 2. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(v).

Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests