By Shane Wright
Australians would be able to use cash to buy their groceries or clothes for their children but not a carton of beer from the local bottle shop under proposals being examined to ensure cash remains circulating in the economy.
A discussion paper released on Friday by the government also signals businesses that provide essential goods and services could be allowed to accept a maximum payment in cash, or between certain hours of the trading day.
And firms could face both formal legal penalties from regulators and private class actions from aggrieved customers with the government concerned some businesses may try to impose a surcharge on people who pay with cash.
Amid a collapse in the use of cash – which now accounts for less than 13 per cent of all transactions – and financial turmoil in the cash-moving industry, the government this year revealed it would mandate the use of cash from the start of 2026.
The discussion paper canvasses which businesses will be affected by the mandate.
While the nation does not have a standardised list of what constitutes an “essential business”, the discussion paper suggests supermarkets, pharmacies, department stores, dentists, GPs, hardware stores, third-party insurance providers, schools, pet stores and vets, petrol stations, utilities providers and car mechanics would fall under the definition.
Supermarkets would have to offer cash payments to customers but bottle shops not under a planned cash mandate.Credit: James Davies
Bottle shops, cafes, jewellers, takeaway food outlets and hairdressers would not be affected.
Certain small businesses may be exempt from the mandate, depending on their turnover levels and the type of good or service they supply to consumers.
The government is also considering the size of cash payments, and when they are accepted, as part of its mandate.
One option is to apply a dollar limit which would allow affected businesses to accept cash up to a certain threshold.
“This approach aims to reduce the burden on businesses by limiting the volume of cash transactions they must handle, while still ensuring that consumers can use cash for smaller, everyday purchases,” the discussion paper notes.
Another option is to have a time limit, under which cash would have to be acceptable during certain hours of the day, such as between 6am and 10pm.
When the mandate was announced, Treasurer Jim Chalmers said the government did not want to penalise businesses that failed to accept cash.
But the discussion paper argues there will have to be some penalty, be it through a regulator such as the Australian Competition and Consumer Commission, or public pressure to ensure businesses take cash.
It canvasses the idea of customers beginning privately funded class actions against a business that tries to avoid its obligations.
The discussion paper admits that without a deterrent, some businesses may seek to avoid the mandate or even inflict a “cash surcharge” on customers.
“Anti-avoidance measures could assist in preventing businesses from circumventing the cash
acceptance mandate. Without these measures, businesses may find otherwise lawful ways to
undermine the effectiveness of the mandate,” it states.
Public comment on the discussion paper closes on February 14.
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