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RBA governor Michele Bullock has said cash isn\u2019t making a comeback.Credit: Dominic Lorrimer<\/p>\n
The Consumer Action Law Centre said many people had valid reasons for wanting to use cash, and should be allowed to keep doing so.<\/p>\n
The centre\u2019s director of policy and campaigns, Jean Skeat, said cash was crucial for people who don\u2019t have access to a mobile phone or online services.<\/p>\n
\u201cAnd it\u2019s not just older people I am referring to, it\u2019s people in vulnerable situations like the homeless, people in prisons, or those fleeing homes because of family violence,\u201d she said.<\/p>\n
Cash usage is most common among older generations, those on low incomes and people in regional and rural areas, Australian Banking Association data shows.<\/p>\n
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Cash usage is most common among older generations, low-income people and in regional and rural areas.Credit: John Woudstra<\/p>\n
Skeat said not everyone was comfortable using online forms of payment. \u201cAnd who can blame them with the meteoric rise in scams<\/a>, and the potential for unwanted scrutiny and surveillance that online payment methods invite?\u201d she said.<\/p>\n \u201cThe banks and government must take this issue seriously, and ensure cash stays viable long into the future.\u201d<\/p>\n CHOICE head of policy Tom Abourizk said cash must be \u201caccessible, accepted by businesses selling essentials, and consumers should be able to pay with cash without any surcharges\u201d.<\/p>\n CHOICE is pushing for the government to ensure people retain reasonable, free access to cash; to require businesses to accept cash; and ensure cash is free by banning any surcharges on paying with it.<\/p>\n People who rely on cash say they value its convenience, privacy and security, an RBA survey shows. They also use it for budgeting purposes, for payments to family and friends, and report they don\u2019t trust banks.<\/p>\n But banknotes are not just used for legitimate day-to-day transactions. The Reserve Bank suggests just 9 to 26 per cent of all Australian banknotes are used for transactional purposes.<\/p>\n The most common use of banknotes is hoarding<\/a>. Australians are withdrawing large amounts of cash to put it aside \u2014 a trend that gathered pace in the COVID pandemic, when the value of banknotes in circulation increased by 22 per cent, the Reserve Bank said.<\/p>\n It said 55 to 80 per cent of all Australian banknotes currently in circulation are hoarded domestically or internationally. In value terms, this accounts for between $56 billion and $81 billion in cash set aside for a rainy day. <\/p>\n The remaining cash is either lost or used in the \u201cshadow economy\u201d \u2014 concealing legal activities to avoid taxation, and covering illegal production such as the production or sale of drugs.<\/p>\n The Australian Banking Association said shadow economy spending accounted for an increasingly large part of overall cash spending.<\/p>\n \u201cCash usage for legitimate purposes is expected to continue declining to 4 per cent of payments by 2030,\u201d it said. By that time, it said cash use in the shadow economy could outstrip the use of cash for legitimate purposes.<\/p>\n
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