MIGRATION AMENDMENT (CREDIT CARD SURCHARGE) REGULATION 2014 (SLI NO 39 OF 2014) EXPLANATORY STATEMENT

MIGRATION AMENDMENT (CREDIT CARD SURCHARGE) REGULATION 2014 (SLI NO 39 OF 2014)

Select Legislative Instrument No. 39, 2014

Subsection 504(1) of the Migration Act 1958 (the Act) relevantly provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

In addition regulations may be made pursuant to the provisions listed in Attachment A.

The purpose of the Migration Amendment (Credit Card Surcharge) Regulation 2014 (the Regulation) is to amend Migration Regulations 1994 (the Principal Regulations) to allow the department to recover the cost of certain administrative fees, by charging a credit card surcharge on applicants who pay an instalment or part of an instalment of their visa application charge (VAC) with a credit card.

These administrative fees are charged to the department by credit card issuers on any transaction paid to the department via credit card, and do not form part of the VAC paid by the applicant. The relevant surcharge is intended to be a reflection of the charges by the credit card issuer and the department's banking service provider and is dependent on the amount of the instalment of VAC that visa applicants pay with their credit card.

These fees are only liable to be paid by visa applicants when they pay instalments of, or part instalments of, their VAC with a credit card. Where visa applicants pay their instalments of VAC through a direct bank transfer payment method, the surcharge is not liable to be paid.

A Statement of Compatibility with Human Rights (Statement) has been completed for the Regulation, in accordance with Human Rights (Parliamentary Scrutiny) Act 2011. The Statement's overall assessment is that the Regulation is compatible with human rights as it does not raise any human right issues. A copy of the Statement is at Attachment B.

The Act specifies no conditions that need to be satisfied before the power to make the Regulation may be exercised.

The Office of Best Practice Regulation (the OBPR) has been consulted in relation to the amendments made by Schedule 1 of the Regulation. The OBPR advises that the amendments appears to be machinery in nature and imposes minor (and avoidable) compliance costs on business, community organisations or individuals and notes that a Regulation Impact Statement will not be required. The OBPR consultation reference is 16812.

The Department of Foreign Affairs and Trade has been consulted about the surcharge for the purpose of general comment. They are supportive of the measures but note that there may be some countries where the surcharge cannot be charged due to agreements with banks and financial institutions of the host country which prohibit such a charge. It was stated that other countries operate in a financial sector governed by local business and governance. We may not, therefore be able to impose Australian standards in some situations. In response the department intends to draft instruments under the waiver provisions for applications made in those countries.

On 12 and 14 March 2014, the department advised the Migration Institute of Australia and the Law Council of Australia of the surcharge as they are key stakeholders and representative organisations in the immigration advice sector. This information was provided for distribution to their members. The surcharge introduction was also discussed at the quarterly Migration Advice and Industry Liaison (MAIL) meeting on 21 March 2014.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Overview of the Legislative Instrument

The Migration Amendment (Credit Card Surcharge) Regulation 2014 (the Regulation) amends the Migration Regulations 1994 to introduce a credit card fee (surcharge). The surcharge applies to credit card payments made by clients when paying a visa application fee.

The surcharge abides by the Reserve Bank of Australia (RBA) surcharging standards. The standards allow merchants to pass on the cost of credit and debit card transactions to customers via a surcharge. The surcharge is calculated based on the reasonable cost of acceptance methodology, which is defined by the RBA and limited to merchant service fees, system establishment costs and direct costs associated with point of sale terminals. The surcharge does not apply to debit card payments.

Human rights implications

This Regulation does not engage any of the applicable rights or freedoms.

Conclusion

This Regulation is compatible with human rights as it does not raise any human rights issues.

The Hon. Scott Morrison MP, Minister for Immigration and Border Protection

ATTACHMENT C

Details of the Migration Amendment (Credit Card Surcharge) Regulation 2014

Section 1 - Name of Regulation

This section provides that the title of the Regulation is the Migration Amendment (Credit Card Surcharge) Regulation 2014 (the Regulation).

Section 2 - Commencement

This section provides that the Regulation commences on 19 April 2014.

Section 3 - Authority

This section provides that the Regulation is made under the Migration Act 1958 (the Act).

The purpose of this section is to set out the Act under which the Regulation is made.

Section 4 - Schedule(s)

This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

The purpose of this section is to provide for how the amendments in this Regulation operate.

Schedule 1 - Amendments

The purpose of the amendments in this Schedule is to allow the department to recover the cost of administrative fees charged to the department by credit card issuers and its banking service providers, by charging a credit card surcharge, on applicants who pay an instalment or part of an instalment of their visa application charge (VAC) with a credit card. These administrative fees are charged to the department by credit card issuers and its banking service provider, and do not form part of the VAC paid by the applicant.

These amendments prescribe that visa applicants who pay for an instalment or part of an instalment of VAC on credit card is liable to pay the credit card surcharge. The relevant fee is dependent on the credit card used and the amount of the instalment of VAC that the visa applicant seeks to pay with their credit card.

Accordingly, these amendments will have the effect of requiring relevant visa applicants to pay the relevant surcharge in addition to the VAC to meet the requirements for the lodgement of a valid visa application.

Item 1 - At the end of subregulation 2.12JA(2)

This item amends Division 2.2A of Part 2 to the Migration Regulations 1994 (the Regulations) to insert a new note at the end of subregulation 2.12JA(2).

The new note provides that a credit card surcharge is payable if an instalment, or part of an instalment, of VAC is paid by credit card: see regulation 5.43.

The purpose of this amendment is to provide a reference to the amendments made at item 2 below, which provides for the requirement to pay a credit card surcharge where a part of or the entire instalment of VAC is paid by a credit card.

Item 2 - At the end of Division 5.7 of Part 5

This item amends Division 5.7 of Part 5 to the Regulations to insert a new regulation 5.43. New regulation 5.43 contains five subclauses.

New subclause 5.43(1)

This amendment provides that a visa applicant is liable to pay a fee (the credit card surcharge) if a payment of an instalment, or part of an instalment, of visa application charge in relation to the visa application (the VAC payment) is made by credit card (whether the application is made using the internet or by any other means).

The purpose of this amendment is to require the applicant to pay the credit card surcharge each time an instalment, or part of an instalment, of VAC is paid by a credit card. The amendment has the effect of requiring relevant visa applicants to pay the specified surcharge in order to comply with paragraph 46(1)(c) of the Act, which provides that an application for a visa is only valid if any fees payable is in respect of it under the Regulations have been paid.

New subclause 5.43(2)

This amendment provides that the amount of the credit card surcharge payable is as follows:

* for a VAC payment made by Visa or MasterCard credit card--1.08% of the amount of the VAC payment;

* for a VAC payment made by American Express or Japan Credit Bureau (JCB) credit card--1.99% of the amount of the VAC payment;

* for a VAC payment made by Diners Club International credit card--2.91% of the amount of the VAC payment.

The purpose and effect of this amendment is to set out the types of credit cards and their associated surcharge fees.

New subclause 5.43(3)

This amendment provides that the credit card surcharge is payable when the VAC payment is made.

The purpose and effect of this amendment is to require the applicant to pay a credit card surcharge at any time that the applicant pays the VAC using a credit card.

New subclause 5.43(4)

This amendment provides that the Minister may specify, in a legislative instrument, circumstances in which the credit card surcharge may or must be waived or refunded.

The effect of this amendment is to provide the Minister with the power to create a legislative instrument, which provides for the circumstances that a credit card surcharge may, or must, be waived or refunded.

It also provides the Minister with the flexibility to specify the circumstances where he or she believes the credit card surcharge may, or must, be waived or refunded.

New subclause 5.43(5)

This amendment provides that the Minister may, or must, waive or refund payment of the credit card surcharge in circumstances specified in the subclause 5.43(4).

The effect of this amendment is to provide the Minister with the power to waive or refund payments of the credit card surcharge in circumstances specified in the new subclause 5.43(4).

Item 3 - At the end of Schedule 13

This item adds Part 29 at the end of Schedule 13 to the Regulations to deal with the transitional arrangements in respect of the amendments made by this Regulation.

The heading of new Part 29 is 'Amendments made by the Migration Amendment (Credit Card Surcharge) Regulation 2014'.

New clause 2901 provides that the amendments of these Regulations made by Schedule 1 to the Migration Amendment (Credit Card Surcharge) Regulation 2014 apply in relation to the payment of an instalment, or part of an instalment, of VAC made on or after 19 April 2014.

The purpose of these amendments is to provide for the VAC payments to which the amendments in this Regulation applies.

Commonwealth Numbered Regulations - Explanatory Statements

Select Legislative Instrument No. 39, 2014