Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones have promised small businesses that they will receive “appropriate exemptions” from the Government’s proposed cash mandate.
The Government has announced it will mandate that businesses accept cash when selling essential items, like groceries and petrol. Chalmers and Jones say the mandate will both protect Australians who rely on cash and safeguard against digital outages.
“Around 1.5 million Australians use cash to make more than 80 per cent of their in‑person payments,” said the Treasury in a statement. “According to the most recent data, up to 94 per cent of businesses continue to accept cash, and we want to see cash acceptance continue particularly for essentials.”
The Treasury will commence a consultation on the proposed changes “before the end of 2024”. It says it will consider the needs of small businesses during this phase – including why they may need exemptions from the mandate.
Why SMEs need an exemption from the cash mandate
For resource-strapped small businesses, accepting cash is a big expense.
“It mightn’t be immediately obvious why some businesses don’t like cash,” says Swinburne payment systems expert Professor Steve Worthington. “But for many, it’s the most costly payment method to accept.
“Businesses typically need to keep a ‘float’ of cash in their tills overnight and also have to make sure no cash goes missing during their opening hours, count their cash take at the end of each day, make sure it is secure on their premises, and make periodic physical deposits into their bank account.”
The payment systems expert also explained that getting cash in and out of a bank account is becoming more of a challenge. This is because the number of ATMs has fallen by about 60 per cent since 2017. Bank branches are also disappearing – they have seen a 41 per cent decrease since 2017.
The Treasury says that its consultation will investigate how to provide easier access to cash. If all goes to plan, the mandate will commence from January 1, 2026.
