Pat Conaghan (Cowper, National Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I move the second reading amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) that the Bill implements recommendations of the 2021 Payments System Review, first initiated by the Coalition, to modernise the Payment Systems (Regulation) Act 1998;

(b) that under the Bill, key decisions of the Reserve Bank of Australia and the Treasurer—including designating payment systems, imposing access regimes, and setting standards—will not be subject to parliamentary disallowance; and

(c) concerns that the Reserve Bank's narrow mandate does not allow for appropriate consideration of impacts on competition and innovation, and may not be suited to regulating fast-changing industries like fintech and digital payments; and

(2) calls on the Government to ensure that major regulatory decisions made by the Reserve Bank and the Treasurer under the Payment Systems (Regulation) Act 1998 are subject to disallowance to provide an appropriate parliamentary oversight mechanism".

I rise to speak on the Treasury Laws Amendment (Payments System Modernisation) Bill 2025. This bill matters because it takes the Reserve Bank's powers and applies them to far more businesses than before, not just to Apple Pay and Google Pay but to smaller, local fintechs competing with big banks and big finance. We think this expansion justifies allowing the parliament to review or disallow the RBA's regulation. That is a basic parliamentary safeguard and that's all we're asking for.

The payments system is the critical infrastructure underpinning our economy. The payments system includes both the behind-the-scenes infrastructure that moves money, like bank transfers, BPAY and tap-and-go systems, and the services built on top of it, like Visa, Mastercard, Apple Pay and Afterpay. Every tap of a card and every online transaction flows through it.

This system is governed by the Payment Systems (Regulation) Act 1998, or the PSRA. In simple terms, the PSRA lets the Reserve Bank step in and set up the rules for payment systems, like making sure that fees aren't too high, that smaller players can get fair access and that the technology works safely and reliably. For example, in 2004 the PSRA was used by the Reserve Bank to force Visa and Mastercard to open their systems to smaller banks and new entrants, a change that increased competition and enhanced consumer choice. This shows that, when done right, regulation can help level the playing field and deliver choice and lower cost for Australians.

It is an important law but it was written more than 25 years ago. To put that in perspective, in 1998 Amazon was just an online bookstore being run out of Jeff Bezos's garage, and most of us were carrying Nokias, not smartphones. The PSRA was designed for a world of cheques, EFTPOS, Visa and Mastercard. It doesn't cover many of the payment systems Australians rely on today: Apple Pay, Google Pay, Afterpay and newer technologies, such as blockchain based payment systems. That is why we support the objective of this bill. We must ensure the law reflects how Australians actually live, shop and do business in 2025.

The bill does three key things. It updates the PSRA to include modern payment systems like Apple Pay and Afterpay; it introduces a new national-interest power for the Treasurer, allowing intervention in cases involving security, consumer protection or data sovereignty; and it modernises enforcement with new civil penalties, enforceable undertakings and stronger criminal actions. These reforms are sensible and overdue.

In fact, in response to the 2021 payments system review, the coalition led the charge, laying the foundation for these changes with our detailed plan to modernise Australia's payments framework. This bill is just one piece of that larger vision, but, unfortunately, much of the coalition's broader plan remains untouched. Our plan called for a licensing framework for payment providers, giving fintechs and new entrants the regulatory certainty that they need to grow, and clearer rules around digital assets so that Australians remain globally competitive in attracting investment and maintaining innovative fintech businesses. Progress on these reforms has been too slow, and that delay carries a real cost. When Australian start-ups can't get clear rules at home, they take their ideas, their capital and their jobs offshore. That means fewer career opportunities for graduates from Southern Cross University in Coffs Harbour or Charles Sturt in Port Macquarie, who instead moved to Singapore or London. Australians deserve better, and we need to get on with the job.

These reforms take important steps forward. We want to be bipartisan and constructive on the issue. We had one very simple ask, the most basic form of parliamentary oversight, but, unfortunately, Labor could not agree. Under the PSRA none of the Reserve Bank's decisions are subject to parliamentary oversight or are disallowable. That means when the Reserve Bank designates a payment system or sets rules for it, parliament has no power to review or disallow those decisions even when they affect consumer choice, innovation or small-business cost. This bill does not change that, even though it expands the PSRA to cover a far broader range of technologies, providers and payment models than ever before. That's the key issue here. The RBA isn't getting brand-new powers, but its powers are being applied to many more businesses, from global tech giants to small fintech start-ups. The bigger the net, the more important it is that parliament has the ability to review how those powers are being used.

Under the act the RBA's regulatory net will now extend into fast-evolving areas like digital wallets and blockchain based systems. The Reserve Bank's decision will have a wider and more complex commercial, competitive and technological impact. Imagine if the Reserve Bank introduced a standard that unintentionally drove up costs for small business. Parliament would be powerless to act. Let me be clear—we are not questioning the Reserve Bank's competence; it is a respected and capable regulator. However, its mandate is narrow. It looks at efficiency, stability and competition within the payment system. Its mandate doesn't make it well-suited to consider broader economic impacts like whether a new rule might hinder competition for consumer credit or stifle innovation from a fintech start-up. Less competition means higher prices for consumers.

Fintechs are increasingly offering alternatives to legacy payment systems, but if regulation tilts the playing field in favour of incumbents, the risk is that promising innovations never get off the ground. For example, a local fintech could develop a low-cost payment app that starts gaining market share, but if an RBA unintentionally favours the big banks, that start-up could be locked out before it even has the opportunity to compete. That's the kind of concern some of our most innovative businesses have raised—not opposition to regulation itself, which they support, but to the potential for unfair rules that stifle innovation and create structural advantages for incumbents.

Under this bill, even the Treasurer's new powers would not be subject to parliamentary disallowance. To be clear, we support giving the Treasurer these powers. National security, cyber threats and consumer data protection are too important to leave gaps. However, when giving the Treasurer such broad powers, it is entirely reasonable for parliament to have the power to review them. Disallowance is not a radical idea; it is a commonsense safeguard. It would reassure industry that decisions would be made proportionately, transparently and with democratic oversight. It wouldn't stop the government from acting swiftly when needed, but it would give parliament the ability to step in when it must. That's why we've moved our amendment to put these concerns clearly on the record, and in the Senate we will move further amendments to make the decisions of both the RBA and the Treasurer subject to allowance.

The coalition have a proud record on payments reform. We initiated this work in government and we welcome Labor finally picking it up, even if the pace has been slow. We will always support a payment system that is modern and fair and focused—one that keeps the cost down for small business, fosters innovation and protects consumers. Without this most basic form of parliamentary oversight, there is a serious gap. That is why we will keep pressing for a payment system that is not just modern but also accountable to the parliament and to the people.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

Is there a seconder for the amendment?

Darren Chester (Gippsland, National Party, Shadow Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

It being 1.30 pm, the debate is interrupted in accordance with standing order 43 and the debate may be resumed at a later hour. The member will be granted leave to continue to speak if required.