Cash mandate "devil in the detail" disappoints

The Federal Government has watered down its promise to enable Australians to pay cash for essential items and services. 

The government mandate is a direct response to the declining use of cash in the economy and in recognition that no business currently has any obligation to accept cash (despite what many people believe). 

While the government is continuing to consult on its proposed laws to mandate cash as a transaction method, the mandate will apply to fewer businesses than previously outlined in the government’s earlier consultation. 

National Seniors Australia (NSA) has responded to the government’s backing away from what is means by ‘essential’ and is fighting to have cash mandated across a wider range of retailers and service providers. 

You can read our latest submission to the Treasury inquiry here.

NSA CEO, Chris Grice says the draft regulations are disappointing for cash supporters nationwide. 

“While we acknowledge this as a step forward, given there is currently no obligation on retailers to accept cash, we call on the government to enact a cash mandate that includes a greater number of businesses and government agencies to ensure that conditions for cash availability and accessibility are strengthened,” Mr Grice said.

The promised mandate is more restrictive than initially proposed with medications, utilities, telecommunications services and other items no longer considered essential. 

The only retailers the mandate will apply to are supermarkets and petrol stations. This means consumers will be able to pay cash for a packet of Allen’s Snakes at Coles but not for Panadeine Forte at their local pharmacy. 

In the 2024 joint media release announcing the cash mandate, Treasurer Jim Chalmers and then Assistant Treasurer and Minister for Financial Services Stephen Jones said, “The government will mandate that businesses must accept cash when selling essential items, with appropriate exemptions for small businesses”. 

In a subsequent interview, Treasurer Chalmers said that, “We think that’s especially important when it comes to things like petrol and groceries and pharmacy, and in other ways as well”.  

This approach was reflected in the consultation paper on the cash mandate, which included as essential items: water and sewerage; electricity and gas; clothing for children; medicines and medical products; medical and dental services. 

Given the proposed mandate now applies only to groceries and fuel, we ask the government why the above goods and services are no longer considered essential? 

The draft rules also appear to deem that all government services are non-essential, by excluding them from the rules. It is inconsistent that the government can list the broad social benefits of maintaining cash acceptance but then say government services should be exempted and are non-essential. 

In addition to the restrictions to what are deemed to be essential goods and services, there are further exemptions included in the draft regulations: 

• Small businesses are exempt, generally defined as those businesses with annual turnover usually under $10 million. 
• Franchises are exempt based on the turnover of the whole franchise, not the separate businesses. 
• The rules only apply to businesses structured as companies, so those structured as trusts, partnerships, or sole traders, are exempt. 
• The ACCC may grant other exemptions to “entire businesses, classes of retailers, specific retailer sites, or specific classes of retail sites owned by a single business” due to exceptional circumstances or risk to ongoing feasibility of the business due to cost of complying with the rules. These exemptions may be ongoing and without conditions.

Mr Grice said the mandate is an opportunity for government to show it listens to the needs of everyday Australians.  

“Keeping cash accessible and accepted is important to seniors, and the broader community, as a means of basic payment, a backup in emergencies, and for the stability of the broader financial system.” 

To read our full submission click here. To join our Keep Cash campaign click here.

Related reading: Treasurer, The Treasury, NSA Submission