Senate Economics Legislation Committee, , 5:55:00 to 6:04:00
Investigation into the financial implications for government agencies and small businesses following the RBA decision on card surcharges.
Topics: Cost recovery, Government spending
Speakers: Claire McKay, Senator Dean Smith, James Kelly, Unknown Speaker, Senator Andrew Bragg, Hon Katy Gallagher, Senator Lisa Darmanin, Senator Tyron Whitten
Okay, thank you very much for that. Um to a different matter. When did markets group first know uh of the ban on card surcharges? Uh so when did markets group first know the ban on card surcharges would mean additional costs for the commonwealth? Was it something that was it something that government was contemplating uh when the RBA began its review process in October 2024?
So Senator, I'm I might go to Ms. McKay to answer. So partly and just want to make sure I understand the question. Like the government knew at a certain point, and that was just before um it was publicly announced by the RBA that the RBA was going to move to um uh effectively end the practice of surcharging, and the government knew that was going to have consequences for government uh to work through, but uh what those consequences were weren't known at some immediate point in time. They they had to be worked through only if you want to add.
I think that's so I I understand your point that when the RBA's decision was known, government would have a uh a clear authoritative base on which to understand the implications. But were the costs to uh commonwealth entities contemplated, consciously contemplated as the RBA was going through its review process?
Um so Senator, maybe one thing I should just check with you and the other senators before we go further, is um there's obviously questions uh in this space relating to the ATO. They will be matters revenue group can answer. So just a question before we answer more questions here, we can speak to payments policy in general, we can speak to the RBA review. We can actually speak to some of these broader issues you already started asking, but if you would find it more convenient to ask all questions related to this matter in one place, then Miss McKay and I can stay back for the revenue group session. So I just want to check how you want to do this, or you're happy for us to move things to revenue group when they relate to the ATO.
No, let's do as much as we can here. Um shortly just so the so the implications of the payments policy, is that something that your group will have contemplated?
Um so uh Claire McKay, Assistant Secretary of the Payment Scam and Innovation Branch. Um so I guess within our branch, uh we uh do give consideration, I guess, for um just similar to how business would be responding to uh when the card payment reforms would be coming into place. Uh similarly uh government agencies would be uh needing to respond in ways where they would take uh employee strategies that they would also respond to the surcharging changes as well.
So when did you start the work on giving consideration to the implications of changes in policy or decision by the RBA of this kind?
Yes, so I think um with that it is important to say like it was a decision taken by the payment system board. And um that decision was not known until it was taken by the payment system.
On the 31st of March 2026.
Um obviously the decision was taken by the payment system board uh at the board meeting. Um it was just communicated publicly um on the 31st of March. Um I think uh it is a dislike for agencies for them to consider how they do respond to um the changes that come into effect, and they do know um what is the best way for them to be able to respond because they will um consider what is um the use cases that they have and how they will be able to do it. Um that being said, uh there was just some initial consideration that was done. I just do uh give a sense uh of what might be some of the strategies that would need to be employed by some of the agencies uh that was commenced uh early, but it was not done in a widespread way. So it was considered early, but not uh it wasn't done in widespread. We uh we just did an initial focus on some agencies that was thought of who may uh have some of the largest payment costs. Uh it wasn't until after the decision was taken and that it was actually. Know on what the changes would be, uh, that a more um widespread approach was taken, and the assistant treasurer uh did uh allude to the fact that he or he mentioned uh that he contacted his portfolio um uh ministers uh to do a more coordinated approach with entities, and as part of that, that's when we started engaging with other entities.
Okay. Uh thank you very much, uh Ms. McKay. So when you say so when you start to have to rotate the screen.
Yes, that was done within markets group.
And when you say some agencies, can you provide uh can you list those agencies?
Um so as part of the process in terms of when we went out. Um so we we contracted uh portfolio CFOs, and uh then it was the role of portfolio CFOs to engage uh further within that possibility.
So that's but you just said that's the process we're in now. I'm interested which were the agencies that you contemplated uh in the in prior to the 31st of March 2026 decision. You said we, so you have said you were giving consideration to it, there was early consideration, uh we, the fiscal group, um were thinking about it in the context of some oh, sorry, uh markets group, markets group, thank you. Um we were thinking about it in the context of some agencies, then the assistant treasurer goes out more broadly based on this early consideration. So which were the agencies that were part of that early consideration?
Um for that one, I would have to take the specifics of the agencies on notice because I actually don't have the um the list, it was a small number, and I just wouldn't want to get them wrong. Okay.
Long list, short list?
No, it was it was a short list.
It was a short list, as Mr.
Like just to put it in context, so this is before the payment system board had made its decision. We were contemplating what would that mean for the Commonwealth. It's also fair to say that the payment system board was well aware that the decisions it made would affect um bodies that in some ways their their ability to, you know, the um receiving payment on taxes or the regulated prices. So you can actually see that in the consultations report. That's the kind of group of entities that we are thinking about.
Was the HEO on that list?
Okay, I'm rotating the call. We can come back to you, Senator Smith because this could be going through. So I would I would you keep interrupting me when I try and wind you up. So I think they have taken elements of notice. You can come back and have another go if you need to. Senator Whitten.
Thanks, Chair. Um I've got some questions in particular about the CGT changes and their effect on junior explorers.
Uh you'll have to ask revenue group those questions. Sorry, revenue group who are who appear after fiscal group. Okay. So two sessions from here.
Sorry, okay, sorry. Alrighty. I now I had Senator Bragg up next. I think that's the one.
Interesting. Senator Smith's last question was the ATO on the list?
So um I'm sorry, that I believe it was the ATO. Um I would believe it would be home affairs. And I suspect that's the question.
So we so yeah, so yeah, so when did you know that there'd be these charges facing different agencies?
So Senator.
From this slide. So the so-called surcharge ban.
So the decision was announced on the 31st of March, as Ms. McKay said. Yeah. The PSB made the decision before that, shortly before that. We had some notice um that that was going to be the outcome that they got announced, but it was very short notice. Yeah. And I think it's fair to say, you know, that final PSB meeting where they decided it, you know, multiple options went in the room, and so there was always it was quite open to this.