Yahoo Finance Dark reality of cashless fight: Aussie 'took cash away and problems stopped'
Businesses could be fined up to $25,000 under the proposed law.
A proposed law that would force Aussie businesses to accept and carry cash has sparked a lot of debate. If legislated, fines of between $5,000 to $25,000 could be handed out to those not making sure cash-carrying customers are accommodated.
A poll of more than 3,000 Yahoo Finance readers found an overwhelming majority (90 per cent) support the Keeping Cash Transactions in Australia Bill and they believe businesses should ensure cash remains in circulation. But how would a policy like that impact businesses that are already totally cashless?
Bryan Wareham runs The Heritage Bakery on the NSW south coast and he told Yahoo Finance it would cause a huge change in the way he operates.
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Safety is the biggest priority
The Heritage Bakery went cashless far before others in Australia hopped on the trend post-COVID. It was back in 2016 that the previous owner made the switch to only accepting digital payments and the sole purpose was to protect staff from break-ins and burglaries.
Wareham said a large part of his 35-member team is made up of teenagers who are experiencing their first job. The first shift starts at 2am to have the baked goods ready when the store opens and there have been times when staff walked in and saw thieves robbing the joint.
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"So what are these workers to do?" he told Yahoo Finance. "They retreat, they call the police, they confront these people? I don't want to be involved in that...I don't want to confront a burglar.
"They might be on drugs, they might be drunk, they might be desperate, they might be armed or not, you know, all these things, right? So we took the cash away and those problems stopped for us."
He said being forced to carry cash on the premises could open up that threat again, especially over the weekend when the banks are closed.
"We would have somewhere in our possession possibly considerable amounts of money...and if I'm the owner of the business walking to my car and I get whacked over the head with a spade by someone who thinks I've got the money in my pocket...no, I don't want that," he explained.
If the proposed law was mandated, businesses would have to get money insurance to protect themselves, which would add to their outgoings at a time when many are struggling with the rising cost of living.
Australia doesn't have the infrastructure to support the bill
The Heritage Bakery is in Milton and Wareham said the closest Commonwealth Bank branch is in nearby Ulladulla. If that branch closed, the bakery owner would have to travel at least 37km one-way to the next closest branch each day to deposit his earnings.
All the closest CBA branches close at 4pm and the bakery remains open until 6pm. Wareham said if the bill became law, Australian banks would need to seriously step up.
"There's going to have to be infrastructure to be able to process cash, which is withering by the day," he explained to Yahoo Finance. "ATMs and bank branches are disappearing as fast as they are and banks' willingness to accept cash is reducing."
The rise of digital payments has led to hundreds of bank branches and ATMs shutting around Australia, with people in rural and regional communities hit the hardest. A recent Senate inquiry revealed a whopping 798 regional branches have closed in the five years to June 2023.
In areas where the last bank has closed, like the remote mining town of Tom Price in WA, residents are forced to travel 700km to the nearest branch.
Inquiry chair and Nationals Senator Matt Canavan suggested increasing a levy on Australia's biggest banks to ensure these branches could remain open. But estimates predicted a large chunk of that levy, which applies to Commonwealth Bank, Westpac, ANZ, NAB and Macquarie Bank, would be passed on to customers.
There would be an extra $370 million in fees and interest rate increases forecast for customers to keep those branches open.
In another issue plaguing rural and regional residents and businesses, many have been depending on cash transit business Armaguard to manage their cash. But the company has been in financial strife recently and its future remains in limbo.
Wareham asked how businesses will cope if they're forced to carry cash if Armaguard goes under.
How would the proposed law work?
The Keeping Cash Transactions in Australia Bill 2024 was introduced this week by MP Andrew Gee and was supported by Bob Katter.
“Many people, across both my electorate of Calare and around our great country, hold concerns and fears that the use of cash for transactions in Australia is being phased out and will soon disappear,” Gee said.
The bill calls for businesses that provide goods and services in "face-to-face settings" that are based in a "premises, structure or vehicle" must offer to accept, and must accept, payment in cash if the transaction isn't more than $10,000.
If legislated, the maximum civil penalties for not upholding this rule would be $5,000 for a person and $25,000 for a body corporate.
In the bill's wording, it claimed it would have "no financial impact", however, it seems like there would have to be a lot of money spent by individuals and businesses across Australia to ensure everything is above board.
The proposed law does allow for some exceptions. Businesses could be exempt from carrying and accepting cash if:
offering to accept payment in cash would pose a reasonable security risk
offering to accept payment in cash would be contrary to another law of the Commonwealth or a law of a State or Territory
offering to accept payment in cash would be contrary to current health advice issued by an official or agency of the Commonwealth or of the State or Territory in which the transaction is made
cash in the form of change for the purposes of the transaction is needed but not readily available
So, even if the law was approved by parliament, customers wouldn't have an iron-clad guarantee that whatever shop, cafe or venue they stepped into would accept their cold-hard cash.
Why have some businesses gone cashless?
This will depend on each business and their needs. For Wareham, the biggest reason to ditch cash was to make it a bit safer for him and his staff.
He said it also eliminates the need to deposit cash at his local bank branch and kept his business running smoothly because staff aren't fiddling with cash for every customer.
There are plenty of other reasons, with one business claiming it's better for staff health because there's a smaller risk of touching bacteria on cash.
Recent data shows that 87 per cent of all transactions in Australia are done digitally, meaning just 13 per cent are done with cash.
Wareham said if it was the other way around then his bakery would probably accept cash payments, but when the overwhelming majority prefer to tap and go, he feels it's smarter to go in that direction.
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