By Dale Webster
Statement of position on Federal Government Cash Mandate proposal
The Federal Government has published a proposal for a cash mandate that will only apply to a legislated list of “essential” good and services and give express permission to more than 97 per cent of businesses in Australia* to refuse to accept cash.
Due to the restrictions and exemptions attached to this proposal, I cannot support it.
I believe the proposed legislation in its current form has the potential to cause more harm than good, accelerating the decline in cash acceptance by giving almost all businesses in Australia an easy out as they face the challenges of managing cash as cash “access” is allowed to decline.
The more access to cash is reduced, the harder and more expensive it is for businesses to deal in it.
Sooner or later a tipping point will be reached when it’s just not worth the trouble or expense.
While a legal avenue to allow businesses to refuse to accept cash does already exist in Australia, there is a distinct difference between putting up a sign and asking frontline staff to explain how purchase contracts work to irate customers 20 times a day at the risk of being abused compared to being given express legal permission to say, “sorry, the government has given us an exemption from having to take cash.”
I also do not support a mandate only being applied to an arbitrary list of goods and services rather than a blanket law that protects a right to pay with cash in any circumstances.
A qualified mandate undermines the basic principle that cash is legal tender and the administration of such a convoluted and sometimes nonsensical list (children’s clothes are essential but not adults) will act as a further disincentive to its use, which in turn impacts the decline in cash access.
It becomes a vicious cycle, one affecting the other until each has worn the other away.
The country Australia should be paying close attention to as it goes into this debate is Sweden.
Sweden is the world’s most famous near-cashess economy but in recent time has been back-pedalling as hard as it can from the precipice of total cashlessness.
Why? Because it has learnt through experience that cash is, for the foreseeable future, essential.
The Swedish Government’s biggest problem now is that it allowed cashlessness to go so far, so fast, that cash access will have to be almost completely rebuilt.
It is trying to do that by introducing legislation that has given the central bank clearer and expanded responsibility for the cash infrastructure in Sweden.
Also on the table are laws to protect the acceptance of the Swedish krona in its capacity as legal tender, a cash mandate and regulations to ensure banks provide adequate cash service to business customers at branches, something that has all but disappeared in Sweden.
Australia needs to heed this warning.
If the welfare of impacts of declining cash access are not enough to spur the government into action, then what academic Gustav Peebles has said about the consequences for the central bank and ultimately, the stability of the banking industry might.
I have previously referenced Peebles’ research on the welfare impacts of cashlessness in Sweden in my piece Big four banks casting a dangerous shadow: Are cashed-up and bankless towns just watching the money go round and round?
In his 2019 paper “Cash Deserts and Cash Swamps” he discusses the disintegration of cash access in that country, describing the same welfare problems regional Australians have been facing since banks began ramping up the closures of regional branches here in the 1990s.
Peebles returned to the subject in 2021 with “Banking on digital money: Swedish Cashlessness and the Fraying Currency Tether”, a fascinating exploration of the eventual economic consequences of letting banks wipe their hands of the business of cash when cash is still legal tender and necessary.
He says the introduction of an e-krona is not about replacing cash – it is an attempt by the government to wrestle back control of Sweden’s money from the banks.
The paper can be read here.
If the Australian Government has any sense, it needs to do everything it can to secure the position of cash in society, not jeopardise it.
That means a cash mandate with no qualifications or exemptions.
It also means sorting out the bank problem.
Branch closures and the downgrading of branches to cashless offices, which is now gaining momentum even in regional areas, needs to be addressed as a matter of urgency.
The back of the work the Government should be focusing on now has already been broken by a 15-month Senate inquiry into regional bank closures that examined the issue of declining cash access in great detail.
Eight recommendations were made with the Government making a commitment to guaranteeing reasonable access to cash at the top of the list.
The senators also determined that the most logical solution to the decline in cash access would be the re-establishment of a government bank, calling for an expert panel to be established to assess and cost the appropriate model.
To the Albanese Government’s great shame, that Senate report has been languishing in a bottom draw in the Treasury Department for nine months while the Treasurer Jim Chalmers picked the eyes out of it, coming up with half-baked, ill-informed “solutions” to very complex problems.
Dr Chalmers’ pseudo cash mandate is not even an original idea, having been ripped off from the Keeping Cash Transactions in Australia Bill introduced to parliament in June last year by independent MP Andrew Gee, which Treasury’s consultation paper seems to have derailed.
Importantly, Mr Gee’s Bill had none of the exemptions being proposed by Dr Chalmers to hose down its effectiveness and distort its impact.
I seriously question the integrity of a man who can’t work with others, including members of his own party, on issues they indisputably have put more time and thought into and been able to cast aside political ideology to come up with solutions that are acceptable to all for the good of the people who voted them into office.
On that note, it is a hard NO from me on the Albanese Government’s cash mandate proposal.
I’d rather see it binned than go through as it stands or with minor amendments.
It may as well be called a mandate to refuse cash.
Mandating cash acceptance
Submissions close February 14, 2025
*Dale Webster received a grant from the Public Fund for Journalism to investigate regional bank closures and for this work was named Freelance Journalist of the Year in 2022 by the Walkley Foundation. Her data was the trigger for the 2023-24 Senate inquiry looking at the issue and her reporting and research was referenced 17 times in the final report.
This article was originally published on The Regional
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The Labor Party no longer represents or supports the electorate that voted it to office during the 1980’s. Moving to a cashless society is simply dancing to the tune of the globalists, the WEF and the IMF. It is another step towards CBCDs and once m money becomes fully digital then autocratic governments can control all electorates regardless of political differences and loyalties. Unfortunately the LNP offers no sensible policy to protest this foolish policy.
As long as you’re prepared to never, ever criticize whichever govt is in power, cashless is good. Trust the banks to look after your money. You want to criticize the banks for telling you what to spend your money on so as to reduce your carbon footprint, think again. You criticize the banks you are criticizing the govt indirectly. Look to China and their Social Credit Score. It works for the Communist Party, why not here? Stop with protests peasants. Get with the programme – neo-feudalism, cashless – double good.
Change is always fraught with fears and dangers.
For the past ten years or so I have hardly used cash. I find it is a better way for me to manage my money, my savings and achieve my financial goals.
The times I do get to have some cash it usually goes to a homeless person in need of a meal.
Give a thought for the tooth fairy! What is the world coming to?
Seriously though, I belong to a small group of tennis ladies who play tennis every week. We pay cash into a kitty, which is held by our nominated treasurer for our weekly lotto numbers, our tennis fees, and a few dollars to save for the end of the year Christmas lunch. To have to open a bank account for our little group would be a nightmare. Cash has been the easiest and most practical way to operate.
going cashless would jeopardise school lunches, church collection plates, buskers, beggars, pocket money, markets, garage sales, tips, small home maintenance businesses, charities, mobile vendors, sports fees, plus the satisfaction of looking in your wallet and knowing exactly how much left you have to spend
I pretty much ceased using cash when Covid struck and I saw people coughing into their hands then reaching into their wallets to pay in notes and coin. Question. How much money would the government save if it didn’t print money?
I only use cash for private 2nd hand purchases, fruit/vegie stalls and the carwash. But I need it for those things because they’re cheaper, more convenient and often better quality.
But I’m not everyone. A lot of people prefer cash for various (honest) reasons.