The government’s long-promised cash mandate is finally taking shape, but critics say it’s more a token gesture than a true commitment to keeping cash alive.

Assistant Treasurer Daniel Mulino announced on Friday that the Albanese Government has released draft regulations to ensure Aussies who rely on cash can still use it for essential purchases like groceries and fuel.

Under the proposal, large grocery retailers and fuel stations will be required to accept cash for in-person transactions of up to $500. The rules will be enshrined in new mandatory industry codes of conduct and are being billed as a “balanced, practical, and sensible step” to support cash users while minimising costs for businesses.

But there’s a catch, several, in fact.

Small businesses with turnover under $10 million are exempt, and even large supermarkets can apply to the ACCC for exemptions in ‘exceptional circumstances’, such as when the cost or logistics of handling cash are deemed too hard.

In short, while the new rules are aimed at keeping cash viable, they leave plenty of room for businesses to opt out.

Critics call mandate a watered-down promise

Cash campaigner Jim Bryce, founder of the Cash Welcome movement, says the draft regulations are “not just less than was promised, they greenlight the cashless society”.

“It’s not a cash mandate if cash isn’t mandated,” Bryce said. “Supermarkets will only need one cash terminal. They can even claim they’re a small business and avoid accepting cash altogether. Or they can say it’s too difficult and that’s enough to be exempt.”

Bryce also took aim at Treasurer Jim Chalmers, saying the government had backflipped on earlier commitments.

“Chalmers said the mandate would apply to all retailers selling essentials like food, medicine and fuel,” he said. “Now it’s just groceries and petrol, and only maybe.”

Why the government’s pushing for a cash mandate

The government argues the policy is about protecting vulnerable Australians, especially older people, those in regional areas and anyone without reliable access to digital banking.

“Cash still has an ongoing place in our society,” said Mulino. “These regulations will help ensure Australians won’t be left behind for grocery and fuel purchases as many businesses move to cashless payment.”

Mulino observed that cash remains vital during emergencies such as power outages or network failures, when digital payments simply don’t work.

According to Reserve Bank data, cash use has plummeted from 70 per cent of consumer payments in 2007 to just 13 per cent in 2022. Yet around 1.5 million Australians still rely on cash for more than 80 per cent of their purchases.

Small business gets a pass

The government’s move to exempt small businesses them from the cash mandate has been welcomed, by business owners.

Accepting cash comes with overheads, from installing tills, training staff, to organising secure transport. Many small traders have already gone card-only to cut costs and save time. To be exempt from the cash mandate, businesses must neet the existing definition of small business under the Income Tax Assessment Act, that is hose with annual turnover under $10 million. Franchised businesses will be assessed on the combined turnover of the whole franchise.

Still, the line between small and large isn’t always clear. Bryce points out that supermarkets operating under franchise models could easily slip through the cracks.

Penalties and exemptions to the cash mandate

For those covered by the rules, there’s some real financial weight behind compliance. Businesses refusing to accept cash could face civil penalties of up to 600 penalty units (about $198,000).

There’s also a long list of potential exemptions. The ACCC could allow supermarkets to dodge the rules if, for instance, natural disasters disrupt cash transport or the cost of compliance “poses a significant risk to the ongoing feasibility” of the business.

Critics worry those clauses could become convenient loopholes, especially as cash distribution becomes more difficult and expensive with the decline of bank branches and cash transport services.

Have your say on the mandate

Public consultation on the draft regulations is open until 31 October 2025, with the final rules expected sometime next year. The government plans to review the mandate after three years to see if it’s ‘functioning as intended where it matters most’.

That review will consider whether to expand the mandate to other sectors and assess its impact on business.

Meanwhile, the Council of Financial Regulators and the ACCC are also exploring reforms to the cash distribution system to make handling cash cheaper and more efficient.

Cash mandate a cbackwards step?

Teh giovernment see the draft regulations as a middle grounda, providing a way to protect cash users without forcing costly change on small businesses.

But for campaigners like Jim Bryce, it’s another sign Australia is quietly edging closer to a cashless future.

“If retailers can simply claim it’s too difficult to accept cash, banks will make sure it’s difficult. We’ll all be lining up for the one cash terminal at Coles,  if we’re lucky,” says Bryce.

Want more? Get our newsletter delivered straight to your inbox! Follow Business Builders on Facebook, X, Instagram, and LinkedIn.