The New South Wales (NSW) government has acted swiftly in response to the unlawful imposition of merchant fees, which have impacted millions of residents. Between 2016 and 2023, approximately 92 million transactions were subject to around $144 million in illegal charges. The issue came to light during the NSW Auditor-General’s audit of the Department of Customer Service’s (DCS) financial statements for the 2023-24 fiscal year. Legal advice from as early as 2016 revealed the illegality of these surcharges, yet their continuous application defied this guidance.
Strengthening transaction transparency
- Formation of a taskforce: The Minns Labour Government has swiftly established an incident management taskforce to tackle unlawful charges. This taskforce has already removed more than 90% of surcharges from online payments, including key transactions like driver licence renewals and vehicle registrations.
- Investigation requests: The Treasurer, alongside the Minister for Customer Service and Digital Government, has formally called for the NSW Ombudsman to investigate the potential maladministration that led to the continued imposition of these unlawful fees. Additionally, the Secretary of the Department of Customer Service (DCS) has referred the issue to both the Ombudsman and the Independent Commission Against Corruption (ICAC) to examine why legal advice was not acted upon.
- Ceasing fees across departments: The DCS taskforce has successfully stopped unlawful fees charged by Revenue NSW and the Rental Bond Board. The team is now focused on removing fees from all remaining transactions, including those processed via credit card terminals at Service NSW centres.
- Reporting requirements: All NSW government departments are required to report to NSW Treasury by 30 November, confirming if they charge merchant fees and verifying their legal authority to do so.
Rebuilding trust in digital governance
The unlawful imposition of merchant fees has exposed serious governance issues in digital transactions across the NSW public sector. Minister for Customer Service and Digital Government, Jihad Dib, stressed the urgency of addressing these concerns, stating, “Our most immediate priority has been to stop these charges as quickly as possible,” emphasising the immediate need to restore public trust. The continued application of these fees, despite legal advisories, reveals a critical governance failure that requires prompt action to resolve.
Minister for Finance Courtney Houssos emphasised, “We will get to the bottom of what happened and why millions of people were unlawfully charged merchant fees.” This commitment indicates a broader push for accountability and transparency in government transactions, aligning with public expectations for lawful conduct.
The NSW Government’s response is set to reshape digital governance by implementing stricter oversight and compliance measures to ensure all departments follow legal standards in financial transactions. The government is actively urging affected individuals to register for updates, ensuring open communication and inclusive resolution. Their swift actions to halt unlawful merchant fees demonstrate a strong commitment to accountability and reform in public sector financial practices, reinforcing transparency and legal compliance within digital governance.