The 2025 Budget has introduced a series of major financial changes, including a significant shift in cash policies. These reforms are expected to impact businesses, consumers, and the broader economy in various ways. Government officials argue that the changes will modernise the financial system, while critics warn of potential challenges ahead.
As the new policies take effect, many are wondering how their everyday transactions will be affected.
The Albanese government has taken a bold step towards modernising the country’s payment systems. In a move that’s set to shake up the way millions of Australians shop, the 2025 Federal Budget has outlined plans to address what many consider to be ‘unfair’ card surcharges, propelling the country closer to becoming a cashless society.
For years, consumers have been voicing their frustrations over additional fees tacked onto their purchases simply because of their chosen payment method. These surcharges, often seen as a penalty for the convenience of card payments, have been a thorn in the side of shoppers and a topic of heated debate. But change is on the horizon, and here’s what you need to know.
The government’s budget announcement has made it clear that the days of excessive debit card surcharges could be numbered. While not outright banning the practice, the government has expressed a firm commitment to eliminating these ‘unfair’ charges, with the Reserve Bank of Australia (RBA) and other stakeholders set to further investigate and implement safeguards that will benefit both consumers and small businesses.
This initiative is part of a broader effort to ensure that Australians get a better deal at the checkout and to support the transition to a predominantly cashless economy.
In addition to tackling card surcharges, the budget is also bringing some relief to those living in regional areas, where bank closures have become an all-too-common occurrence. The government has secured commitments from major banks to keep over 800 branches open in regional and remote Australia until at least 31 July 2027.
Furthermore, there’s a boost in investment for Australia Post’s Bank@Post service, ensuring that around 1,800 regional and remote communities have greater certainty and choice when it comes to banking services.
The push to eliminate debit card surcharges was partly fuelled by public outcry and a particularly passionate 55-page letter to the government from an Australian named McLean Roche. Roche’s detailed submission, backed by receipts and personal experiences, highlighted the extent of the issue, with examples of surcharges that seemed to far exceed the actual cost of card transactions.
Under current regulations, merchants are allowed to apply a surcharge on card payments, but it must be limited to the cost incurred by the merchant for that type of card transaction. However, Roche and many others have pointed out instances where the surcharges applied appear to be excessive and, in some cases, potentially illegal.
The Competition and Consumer Act 2010 prohibits retailers from imposing excessive card payment surcharges, and the Australian Competition and Consumer Commission (ACCC) has the authority to investigate and enforce this regulation. Despite this, the scale of the problem suggests that many consumers may have been unfairly charged, with estimates suggesting that illegal excessive surcharges have cost Australians more than $2 billion collectively.
In response to these concerns, Finance Minister Katy Gallagher has announced that new legislation will empower the finance minister to amend Commonwealth surcharging policies swiftly. This includes preventing Commonwealth agencies from passing on debit card surcharges from 1 January 2025.
While the contentious issue of weekend and public holiday surcharges in restaurants and cafés remains a separate matter, legal firm Freedman and Gopalan clarifies that such surcharges are legal as long as they are clearly communicated to customers. The ACCC also stipulates that these surcharges must be prominently displayed on menus.
As you await the full implementation of these changes and embrace a future with fewer hidden fees and more straightforward transactions, we’d love to hear your thoughts and stories. Share them with the YourLifeChoices community in the comments below.
Also read: Card payment fees hit $1.3B: What it means for consumers and businesses
