Ace Breaking News – The federal government intends to require businesses to accept cash as payment for groceries, fuel, and other essentials. It will begin to consult on the idea later this year to implement the mandate by 2026. It has already flagged an exemption for small businesses.
What’s next?
The government has also confirmed a timeline for the phasing out of cheques by September 2029.
The federal government will require businesses to accept cash as payment for groceries, fuel, and other essentials but will phase out cheques entirely within five years.
Treasurer Jim Chalmers said the government would begin consultation on a “cash mandate” before the end of the year, but implementation would likely wait until after the election.
“People are increasingly using digital payment methods, but there is an ongoing place for cash in our society … [A mandate] means those who rely on cash will not be left behind,” he said in a joint statement with Financial Services Minister Stephen Jones.
The vast majority of businesses – some 94 per cent – do accept cash, which remains the preferred form of payment for at least 1.5 million Australians.
But crossbenchers Andrew Gee and Bob Katter are among those to have highlighted instances of businesses refusing cash.
Mr Katter drew attention to the issue earlier this year when he was unable to use cash at the cafeteria in Parliament House, which he decried as “another example of a cashless society that gives all the power to the banks and strips you of your freedom.”
Although cash is legal tender, there is currently no legislative requirement to accept cash, provided a business offers another fee-free means of payment.
The government has signaled it will remove small businesses from any mandate, which could also apply to essential banking services, pharmaceuticals, utilities, and health care.
Patricia Sparrow, chief executive of the Council of the Ageing, welcomed the move, saying many older Australians remained hesitant about digital payments.
“People are nervous about being online for security and privacy and older Australians are still more targeted when it comes to scams,” she told the ABC.
“This is a good way for them to be able to continue to shop for things that they need with confidence, without having additional fees and charges.”
The declining use of cash has led to turbulence in its supply chain.
Last year, Armaguard became Australia’s only remaining cash distributor when it acquired a struggling rival Prosegur. But it was soon struggling to stay afloat itself, and in June, its eight largest customers handed it a $50 million lifeline to stave off collapse.
The company blamed the declining use of cash for its woes, citing the expense of delivering small amounts of money to all parts of the country.
‘Orderly’ transition for cheques
The government has also revealed a timeline for its plan to phase out cheques, declaring they will no longer be issued from mid-2028 and no longer be accepted from September 2029.
Mr Chalmers said he had written to the CEOs of the four major banks to convey his expectation that they continue to facilitate the needs of cheque users until those dates.
“The usage of cheques has declined by 90 per cent in the last ten years and many banks and financial institutions are ending cheque issuance for new customers,” his statement read.
“The government is acting to give customers and businesses the certainty and the assistance they need to switch to other payment methods [but] banks also have a responsibility to support cheque users as part of this smooth transition.”
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