The NSW government has launched an investigation into “possible serious maladministration” after it discovered millions of people have been charged merchant fees for services such as driver’s licence renewals despite repeated legal advice to the former government warning the practice was unlawful.
On Wednesday the state’s Finance Minister, Courtney Houssos, revealed two government agencies — Revenue NSW and Service NSW — had charged about $144 million in merchant fees since 2016 across 92 million card transactions.
NSW Finance Minister Courtney Houssos announced the removal of ticketless parking fines, after asking councils to reintroduce physical notices in March.Credit: Dominic Lorrimer
The payments were charged despite the practice being flagged as unlawful in legal advice received from the Crown Solicitor’s Office between February 2016 and December 2022, a government statement said.
The statement also said both Houssos and the Treasurer, Daniel Mookhey, had written to the NSW Ombudsman requesting an investigation into “possible serious maladministration” following the discovery.
The matter has also been referred to the Independent Commission Against Corruption, the statement said, “noting the apparent failure to act on the 2016 Crown Solicitor’s advice”.
The issue was first identified by the NSW Auditor-General while it was reviewing the books of the Department of Customer Service. The auditor then brought to the attention of the current government.
Since then the government said a taskforce had so far switched off fees being charged directly by Revenue NSW and the Rental Bond Board, and stopped fees on more than 80 per cent of Service NSW transactions.
Merchant fee surcharges have been switched off for more than 90 per cent of online payments, including the top 12 Service NSW transactions such as renewing a driver’s licence or vehicle registration or paying a fine, it said in a statement.
“We have acted swiftly to establish a taskforce to deal with this issue. Our immediate efforts are focused on switching off the payment methods that charge these merchant fees as quickly as possible,” Houssos said in a statement.
