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In a cashless society, inclusion must rule

 

When cash was still king, we liked the feel of having ‘real’ money in our pockets and purses. The designs on our coins and banknotes were of interest, too, with cute native animals and people we should have known about but often didn’t.

Coins occupied a special place in the national culture. Copper pennies, the largest coins, were integral to the game of two-up, still legal only on ANZAC day, despite a plethora of gambling forms swamping the nation. Pennies and the rest were swept away by the introduction of decimal currency in 1966, while more recently we’ve seen the disappearance of $1 and $2 notes, and one- and two-cent coins. 

As digital payments grow, the use of cash is rapidly declining, with its share of payments dropping to 13 per cent in 2022, the last year for which RBA data is available. In 2007, cash accounted for 70 per cent of transactions. The figure is projected to fall to just four per cent by 2030.  The move away from cash is not due to government policy but because the market - namely us - is speaking. Cash is no longer king, despite the face of King Charles III appearing on our coins. 

Concerned by the trend, the Australian Government is consulting on the future of cash usage and how to ensure, in the words of the Treasury discussion paper Mandating cash acceptance, that ‘businesses supplying essential goods and services must accept cash as payment method, with appropriate exemptions for small businesses.’ 

The paper notes that core to the Government's payments plan is maintaining access to cash for essential items. A December statement by the Treasurer said as much: ‘For many Australians, cash is more than a payment method, it’s a lifeline…  there is an ongoing place for cash in our society...’

Current laws allow businesses to choose which payment types they accept, and cash is not mandatory, although 94 per cent of businesses continue to take it. 

 

'The preservation of cash as a means of participating in the economy is a critical part of promoting equality for a cohort who are already vulnerable, such as some people experiencing homelessness.'  

 

‘We know people are increasingly using digital payments, but there is an ongoing place for cash in our society,’ the paper says.

‘About 1.5 million Australians use cash to make more than 80 per cent of their in-person payments and cash also provides an easily accessible backup to digital payments in times of natural disaster or digital outage.  

‘Mandating cash for essential purchases, such as groceries and fuel, means those who rely on cash will not be left behind.’ 

Not leaving people behind is vital, as St Vincent de Paul Society in Australia told the inquiry: ‘This does not mean simply ‘bringing them up to speed’ but rather enabling them to continue to use cash for the purchase of essential goods and services’.  

Some people prefer cash for cultural reasons or safety concerns, or are less comfortable using digital platforms. English might not be their first language, or they might live with disability.  Others might prefer cash because it helps them to better manage their financial transactions.  An online world also presents challenges such as scamming, cyber security threats and fraud.  

A significant sub-set of the people we assist are ‘unbanked’ and as such are extremely vulnerable to a shrinking cash economy. The preservation of cash as a means of participating in the economy is a critical part of promoting equality for a cohort who are already vulnerable, such as some people experiencing homelessness.  

Victim/Survivors of Domestic Violence are vulnerable to losing access to digital payment options or being subject to financial surveillance and control via digital financial tools. Cash can be part of an important safety mechanism for these people in times of crisis. 

The Society acknowledges the paper’s support for social inclusion, such as older people and those living in remote communities, but believe it lacks detail on additional strategies, for example community and business education and training, and improved telecommunications infrastructure. 

We support the proposal that corporations conducting trade or commerce within Australia must accept cash when supplying an essential good or service to a consumer and offering in-person payment.  However, we are concerned about a blanket exemption for small businesses and have advised the Government accordingly.   

As for the future, we can be sure about cheques, which are destined to wind up by 30 September 2029, but what about cash? The deadline for deciding which businesses will, or will not, be legally required to continue accepting cash is 1 January 2026. The country may not be watching yet, but before long we will be.

 

 


Mark Gaetani is National President of the St Vincent de Paul Society.

Main image: (Getty images)

 

 

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