In The Grips Of A Cash Famine, By Design…

The 14th February is the closing date for submissions to the Treasury relating to the ongoing access to cash in Australia. I made a show on this called “Are We In The Midst Of A Cash Long Con?” and argued there that the Government many well be playing a long con with the community ahead of the upcoming election.

Remember that the Treasury paper setting up the request for submissions says Cash acceptance refers to the practice of businesses accepting cash as a form of payment for goods and services. Cash acceptance levels must remain sufficient to enable consumers, including those unable to use digital payment methods, to participate in the economy. The Albanese government has said it would mandate that businesses must accept cash when selling essential items like groceries and fuel from 2026.

And we have run extra questions through our SME survey which showed that over the past 3 years, the proportion of SME’s prepared to take cash payments has dropped to less than 60%. Despite this more than 75% would welcome a cash mandate, but again only with the caveat that first cash is readily available, and at low or no cost. There was also a higher level of support for cash in Regional and Rural areas compared with the large cities.

But this cash supply issue is complex, as reported by the AFR, and there is a critical upcoming date of July when the temporary arrangements with Armaguard, who moves cash around the country are up for review.

Actually this is one of the most compelling reasons to create a Government Bank, perhaps for full banking via the Australia Post network.

But of course this is beyond the election horizon of May, so Labour can say they are doing things, in response to the public pressure as encapsulated in the Regional Banking Inquiry. Access to physical cash is a human right which needs protecting, but of course the banks hate it. How the life blood of banking cash, became an expensive overhead is the shame here. But the Government con is a big part of the story.

Remember to make your submission by Valentines day.

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Are We In The Midst Of A Cash Long Con?

Last Tuesday on my live show, I discussed the current Treasury paper on Mandating Cash Acceptance in Australia. But today I want to take this further and I will outline my concern that the Government many well be playing a long con with the community ahead of the upcoming election.

The paper says Cash acceptance refers to the practice of businesses accepting cash as a form of payment for goods and services. Cash acceptance levels must remain sufficient to enable consumers, including those unable to use digital payment methods, to participate in the economy.

my suspicion, is this is more political than anything else. The Government knows cash availability is a BIG issue, and cannot be avoided, so this Treasury paper allows the issue to flow on beyond the next election. Meantime the neo-liberals, in the pockets on the big banks, still want to take our rights to use cash away, so on one hand they can appear to be taking the right for cash seriously, but can also continue to assume the banks they support them. It’s a classic yes Minister long con.

We can break that by making sure we provide responses to Treasury, along the lines, of first, there should be no carve out of essential services – which is difficult to try to define, and all businesses should still be required to accept legal tender in the form of cash. A simple antidote to the long con.

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Households Could Save A Billion, Or More…

Given the current focus on the rise in the use of cash, it is worth remembering that each year Australian households are collectively charged somewhere between 1 billion dollars and 4 billion dollars in payment surcharges, which is a fee paid by customers, in addition to the price of a good or service, allowing merchants to pass on the cost of the customer’s chosen payment method. These days its mostly debit transactions which might also be triggered by electronic payments from phones and other devices, as well as debit and credit cards.

The RBA accelerated a review into merchant payment costs and surcharging, and has now released the 90 plus submissions received from interested parties and it is clearly creating a storm, with some calling for the banning of said surcharges and others arguing that banning surcharges would result in higher prices to consumers.

When surcharging was introduced 20 years ago, the RBA put Australia out of step with most of the rest of the world, where the practice is illegal. At the time the central bank’s intention was to use them as a price signal to customers that the more expensive payment methods at the time – credit cards – were a burden for the seller. I always believed this is a policy error.

They have been out maneuvered by banks and lately FinTechs who have introduced fixed pricing plans in an attempt to reduce payment fee complexity for business customers. These plans let a merchant pay the same cost irrespective of what card the customer uses. But this has resulted in more surcharging of debit cards, which is the fastest growing segment of the payments market, and which in theory should be the cheapest.

So, some firms are benefiting from the current system, especially larger firms. Second, there is little transparency and as transaction volumes rise, the costs on households rise too. Third, the original assumptions about unbundling and price signaling has proven incorrect, as technology has evolved faster than regulators ability to keep up. To me the benefits of removing surcharging altogether outweigh other options, but of course the question will be, will households at the end of the day, get the benefit. They certainly should, but big business are often in the way…

Cash: Wake Up, Its The Antidote To Digital Dystopia!

Well, last week we got a glimpse of the vulnerability of global IT systems, including payment systems, the latest and perhaps most significant of a chapter of accidents, ranging from banks systems going down, through to disruption from floods and fire, when only physical payments in cash were accepted. US cyber-security firm CrowdStrike said it was responsible for the mayhem, which started on Friday after sending a ‘defective’ update to machines running Microsoft apps. Microsoft has suggested customers try rebooting their computers 15 times to resolve the issue.

The IT outage prompted federal politician Bob Katter to demand cash remains in circulation amid the “danger” of relying on digital technology. “This a wake-up call that the risk associated with a cashless society is too high for us to pay,” Mr Katter said.

According to a recent online survey, titled Cashless Future 2024’ while fewer payments may be made in cash these days, Australians are still expressing serious concerns about heading towards a cashless society. Seven in 10 say they’ve concerned, while two in five Aussies are extremely concerned about notes and coins becoming relics.

Significantly, even people who don’t use cash can be concerned about moving towards a cashless society for reasons including privacy concerns, security risks and dependency on technology. This includes concerns about their transaction data being tracked and analysed by corporations or government agencies, and digital payment systems can sometimes be vulnerable to technology outage, hacking or fraud. A recent report said: “Concerns about technological glitches, network outages, or power failures could lead to worries about being unable to make payments in the absence of cash.”

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Don’t Believe The Bankers: More People Are Using Cash!

Contrary to the bankers claiming digital payments are replacing cash, yet more evidence is showing that use of cash is on the RISE! We look at data from New Zealand based on a recent survey as the Reserve Bank there announces pilots to make access to cash easier.

The trend of rising cash use was in fact confirmed recently by the RBA too, though their surveys are just not up to the New Zealand standard, and of course using cash more is also rising in the UK.

Not only is the ongoing use of cash a human right, a protection of freedom, and cheaper than other payment means, but it is also proving to assist households with their budgetting. Do not believe the bankers’ BS…

RBNZ Short: Why Access To Cash Is Essential For Social Cohesion Short: https://youtube.com/shorts/d32BqMmfwUc

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I’m Comyn For Your Cash! With Robbie Barwick…

An important discussion about the future of cash across Australia with Robbie Barwick from The Australian Citizens Party.

The CEO of CBA Matt Comyn floated the idea of limiting cash transactions to $500, so we pull this apart in the context of the Use Cash campaign which ran successfully on the 2nd April.

See my earlier show for detail of that campaign, and the Senate interrogation of the RBA which we also discuss. The Fight For Cash Just Got Terminally Serious! https://youtu.be/LiNSH7I_8xs

https://citizensparty.org.au/

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The Fight For Cash Just Got Terminally Serious!

Despite cash being legal tender in Australia, surprisingly it is legal for businesses to refuse to accept it provided that they inform consumers of their stance before any “contract” for the supply of goods or services is entered into.

The war on cash has taken an interesting turn, with the RBA being questioned by the Senate Inquiry into Regional Bank Branch closures, and claiming the use of cash had fallen, but frankly on thin and filtered evidence; while Armaguard, Australia’s only cash-in-transit business is facing the prospect of collapsing due to the claimed declining use of cash. The RBA, which regulates the payments industry and is responsible for printing money is also involved in the crisis talks.

And a social media campaign, led by the Cash is King Facebook group is calling on Aussies to withdraw and use cash next Tuesday, April 2, in protest against the shift to digital payments. The protest is aimed at showing Australia’s banks and retailers that there is still a demand for the use of cash in society. That is, if you can still find an ATM.

So, action on Tuesday to grab some cash could be an important step on the road to saving cash for All Australians who want to use it, despite pressure from the Government who is responding to huge pressure from the commercial banks. This in turn puts massive pressure on the current Senate review, who is scheduled to hold one more community hearing on Bribie Island on the 16th April. Will the committee who has laid bare the issues of branch closures and removal of cash come good or hook their final report like the earlier Royal Commission Inquiry into Financial Services, which exposed major issues through their hearings, only to turn to water in their final report and recommendations, which allowed the banks to behave business as usual. This time all eyes will be on the Senate.

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Card Fraud Rises Across Australia To $2.2bn

In the most recent incident of card fraud: the gross amount withdrawn or used for all incidents was $2.2 billion while the net loss after any reimbursements paid for all incidents was $476 million. The median amount withdrawn or used per incident was $200, A further 514,300 (2.5 per cent) experienced some kind of scam, and just under 200,000 (1.0 per cent) were victims of identity theft.

The proliferation of the digital world has opened the door for more scans, so we need to be careful with the information we share, the links we click, and monitor statements to look for fraudulent transactions. This is another area where financial education needs to be enhanced, in school and beyond, as many people are too easily caught. Its important to be digitally smart. Maybe cash is safer and easier to manage. Worth thinking about in the context of the current drive to removed cash all together.

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The Front Line In The War On Cash…

I discuss the latest developments on the war on cash with Robbie Barwick from the Citizens Party. In the final sitting week, it’s time to give the politicians a final serve in the interests of the people!

Call Minister Stephen Jones and Labor Senators today to protest capitulation to the banks!

Message:

I’m calling to object to Labor’s capitulation to the banks!
Labor must stand up to the banks by doing two things this week:

  1. Pass the banking reform laws as planned, including civil penalties for executives to hold bankers accountable;
  2. Support the push for a Senate Rural and Regional Affairs and Transport Committee inquiry into the regional banking crisis, including the government post office bank alternative.

Minister for Financial Services Stephen Jones: (02) 6277 7230 Stephen.Jones.MP@aph.gov.au

Click here to find the contact details of the Labor Senators from your state. https://cec.enudgemail.com.au/securl.php?nudge=y1052zpr1128&link=12460&email=robbie@citizensparty.org.au

Choice campaign webpage: https://action.choice.com.au/page/118203/action/1

Coalition banking inquiry blamed for mass branch closures
https://independentaustralia.net/politics/politics-display/coalition-banking-inquiry-blamed-for-mass-branch-closures,17015

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