Transporting cash is back in business – now mandate it
NSA welcomes news that cash will continue to be delivered – but the Treasurer must put his money where his mouth is!
Cash mandate improvements needed
While the promised mandate is welcome, the government has not delivered on it and there are improvements that need to be made.
NSA has told government the mandate, as it stands, has far too many exemptions and is overly complicated.
Among our chief concerns:
Restricting the mandate for “essential” goods and services is problematic when the definition of essential goods excludes things that are clearly essential. For example, is it unreasonable that water, clothing for adults, furniture, whitegoods, and most government services are excluded as items attracting a cash acceptance mandate?
Using business turnover or legal structure as a basis for determining who must make payment by cash available is problematic and would not work in practice. For example, why should a consumer need to know the turnover or legal structure of a business to know if a business must or may not accept cash?
There is a lack of clarity about whether cash acceptance differs by product. For example, if someone buys a loaf of bread and a cake from a bakery, does the bakery have to accept cash for both, or only the bread which is included in the mandate?
You can read our submission here.
The major players in distributing and providing cash to Australians appear to be close to avoiding a cash “truck wreck” that threatened to shut down cash supplies across the nation.
However, with the Federal Government dragging its heels in keeping its promise to mandate the supply of cash, the future is not secure.
Last year, Armaguard, Australia’s only cash transport company, claimed it was at risk of going out of business if its major banking clients and major retailers did not pay more for their services. It was reported that Commonwealth Bank (CBA) CEO, Matt Comyn, acknowledged banks had underpaid for cash services for more than 10 years.
Deloitte Access Economics was called in to find a new pricing model, and it has been reported that Armaguard and the other stakeholders have agreed to it. If so, then it will be up to the Australian Competition and Consumer Commission (ACCC) to authorise it.
The Australian Financial Review (AFR) reported Armaguard and its largest customers – CBA, Westpac, National Australia Bank, ANZ Bank, Coles, Woolworths, Wesfarmers, and Australia Post – “have agreed that pricing for cash transportation will be regulated under a utility-style model that recognises the job of moving banknotes and coins around the economy as an essential service”.
The Australian Banking Association described the development as “an important milestone in working to keep cash available around Australia, even while people are using less of it”.
National Seniors Australia (NSA) CEO, Chris Grice says an agreement is crucial to ensure rural and remote parts of Australia have cash.
“It’s really critical because inconsistency around the internet there is just some parts where it’s very problematic and so cash is ever so important,” he said.
“Just recently we saw another outage in terms of online services for one of the banks.”
Seniors and rural Australians are among the biggest losers if the government fails to deliver on its promise to ensure, in law, the future of cash.
Yes, cash in declining but the rush to a digital-only transaction model has many risks and is being exacerbated by banks and others who are banning cash or hindering access to it.
Bank branches are closing, staff are being laid off, ATMs are being removed, and cheques are being phased out.
This has resulted in Australians owing more than $41.4 billion in credit card debt, with an additional $2.7 billion expected over the festive season. Studies show we spend twice as much using cards because cash makes us more mindful. In a cost-of-living crisis, cash can encourage smarter spending.
Seniors are saying “enough is enough”. Through the Keep Cash campaign, NSA says cash must continue to be accessible and accepted by retailers and banks, to ensure seniors are not digitally excluded.
Cash must be recognised as an important part of the financial and payments system.
All businesses should be subject to a ban on charging a surcharge for paying in cash.
All relevant businesses should be required to clearly post if they accept cash or not and detail any payment surcharges.
Why is the government dragging its feet mandating cash, as it promised earlier this year?
There’s still time for Treasurer, Jim Chalmers, to keep his promise that, “Final details of the mandate will be announced in 2025. Subject to the outcomes of consultation, the mandate would commence from 1 January 2026.”
However, time is running out as we explained in this recent Connect article.
Mr Grice says the government mandate needs to happen soon to keep essential services functioning and force retailers to accept cash.
“We think that’s pretty important, and … there are only a handful of (Parliament) sitting weeks available in the calendar year left before January.
“I think the Treasurer needs to get the skates on and get something happening.”
There’s a lot we all can do to keep cash flowing:
For a start, we can all use cash more, avoiding avoid card surcharges and showing retailers who may be thinking of doing away with cash that there are many people who prefer it.
Many retailers prefer cash and avoid transaction fees but if customers don’t use it then it can become an expense. So, pay by cash … and save! Encourage your friends and family to also pay by cash.
Tell banks to keep their ATMs and counter service staff by transacting at bank point of service.
Become a member of NSA and help us advocate for cash by joining our Keep Cash campaign and tell the government to immediately mandate that cash continue to be readily available.
Spread the message:
- Cash must be recognised as an important part of the financial and payments system.
- All businesses should be subject to a ban on charging a surcharge for paying in cash.
- All relevant businesses should be required to clearly post if they accept cash or not and any payment surcharges.
Related reading: AusBanking, AFR, Banking Day, The Australian, NSA
