The Australian Federal Government has made significant strides towards safeguarding the validity of cash as a payment mode for everyday necessities by issuing key provisional regulations mandating the acceptance of cash for fuel and groceries.
Outlined after a public consultation conducted in the early part of the year, these draft regulations dictate that the obligation to accept cash for fuel and groceries will be restricted to face-to-face transactions of less than $500.
However, small businesses with a combined turnover of less than $10 million, along with those businesses that are part of a franchise arrangement netting under $10 million, are exempt from these regulations. Additionally, companies that face challenges in managing cash transactions are also exempt.
Daniel Mulino, the Assistant Treasurer and Minister for Financial Services, agrees that while Australians are progressively opting for digital payment methods, the government recognizes that cash will still be a vital part of society. He appreciates this as a balanced, pragmatic, and judicious move to aid cash users while also taking businesses into account.
The Federal Government has announced that it will evaluate the mandate in three years to ensure the policy is effectively serving its purpose. This evaluation will also explore whether the mandate should extend to cover other businesses. It will consider the potential impact on companies presently affected by the mandate and any advancements concerning cash distribution and access.
The Council of Financial Regulators and the Australian Competition and Consumer Commission, back in July, issued a consultation paper suggesting various propositions on the regulation of cash distribution. Mulino assured that the government would closely examine the CFR’s recommendations alongside industry feedback, and work diligently to ensure that Australians continue to have access to cash.
What are the new draft regulations issued by the Australian Federal Government?
The new draft regulations mandate the acceptance of cash for fuel and groceries, specifically for in-person transactions that are less than $500.
Who are exempted from these new regulations?
Small businesses with an aggregate turnover of under $10 million, businesses that are part of a franchise arrangement netting under $10 million, and companies that find managing cash transactions difficult are exempted.
What is the future plan for these regulations?
The Federal Government will review the mandate after three years to evaluate its effectiveness. This review will also consider whether the mandate should extend to other businesses and the potential impact on the currently affected companies.
