MICHAEL ROWLAND:
Treasurer, a very good morning to you.
JIM CHALMERS:
Good morning, Michael.
ROWLAND:
Why is the government doing this?
CHALMERS:
We’re making sure that people can pay cash for essential items if they want to and if they need to. We know that people are moving increasingly towards digital payments, but for 1.5 million Australians they still mostly rely on cash.
We’re making cash an ongoing feature of our economy, even as we modernise the payment system. That’s because we understand that for a lot of people cash is a lifeline, it’s a back‑up, it gives people security and peace of mind and that’s why we want to make it an ongoing feature.
That’s why we’re making sure that if people want to pay cash for essential items they can do that. If they have to pay with cash they can do that too, it’s an important back‑up.
ROWLAND:
Okay, so by mandating there’ll be penalties for businesses selling essential services that refuse to accept cash once these changes are in?
CHALMERS:
First of all, about 94 per cent of businesses still accept cash, but that’s down from 99 per cent a few years ago. So most businesses still accept cash.
What we want to do in this consultation period now is work through appropriate carve‑outs for small business. We want to make sure that there’s an appropriate focus on regional areas. There are a bunch of issues to work through.
But our intention here and our policy here is clear. If people want to use cash they will be able to do so for essential items. We think that’s especially important when it comes to things like petrol and groceries and pharmacy, and in other ways as well.
ROWLAND:
Okay. Same time, no such lifeline for cheques. What’s going on there?
CHALMERS:
We flagged some time ago, Michael, that we’d be phasing out cheques, and so the next step in that will be released today with the plan that Stephen Jones and I are releasing.
What that will mean is that banks can continue to issue cheques until the middle of 2028 and have to accept them until the middle of 2029. That’s a pretty long run‑up. What we’re trying to do here is make sure we modernise the payment system, recognising that people are making different choices, increasingly digital choices, but making sure there’s that lifeline there for cash and making sure there’s a long run‑up when it comes out to phasing out cheques.
We think that’s the best balance because people are making different choices. Overwhelmingly those choices are digital, but for a substantial portion of Australians who still want to use cash, we want to make sure and we will make sure that that’s an option for them.
ROWLAND:
Just out of interest, when did the Treasurer of Australia last use cash?
CHALMERS:
I don’t use it often. I was at a church service for one of my kids at my kid’s school and when the plate comes around, occasionally the cash goes in there. But I typically use digital payments, like a lot of people.
But I think there are a lot of Australians, whether they be in the regions, maybe older Australians and others, who like the security of being able to use cash and that’s why we want to make cash an ongoing feature of the economy on our watch. A lot of people either want to or have to use cash and we want to make sure that option is available to them when it comes to essential items.
ROWLAND:
Yeah, it’s certainly hard to whip out our phone when the plate comes around in church, so I’ll give you that, Treasurer.
Hey, listen, let’s move on to other things. The Financial Review is reporting this morning banks potentially face collective levies of $350 million to ensure they keep branches, particularly rural branches, open. What can you tell us about that?
CHALMERS:
I don’t think it’s a secret that the maintenance of regional banking services is a big challenge for a lot of Australians, and it’s a challenge that we’ve been focused on as well.
Nor should it be especially surprising that we engage from time to time in conversations and consultations with the banks to see if we can do better here.
We haven’t come to a concluded view on any policy outcome, we talk with the banks very regularly about some of these sorts of challenges and people should see these stories in that light.
ROWLAND:
Okay. But they’re more likely than not to go ahead, these levies, on banks, and are you worried if they do the banks will simply pass them on to customers in the form of lower interest rates for deposits and potentially still higher rates for mortgage holders?
CHALMERS:
There are a number of considerations. But again, this is not an especially new thing that we’ve been talking to the banks about some of these sorts of challenges. I think every Australian in the bush understands that there has been a withdrawal of services. As the government which governs for the whole country we’re very focused on that, and so we engage in these consultations and conversations from time to time.
We don’t have a concluded view; we have a respectful relationship with the major financial institutions. We like to work together where we can, we like to consult where we can and people should see these stories which have been popping up in the last day couple of days in that light.
ROWLAND:
But just to be clear, just for our purposes, you can confirm Treasury is looking at this?
CHALMERS:
The Treasury has these sorts of conversations all the time.
ROWLAND:
Okay, right.
CHALMERS:
But again, Michael, I’m not trying to be cagey about it. We’ve said very upfront, in a very open way, this is one of the things that troubles us about the way that our financial system is evolving. We want to make sure that people in the bush can have access to an appropriate standard of services.
Of course, from time to time we talk to the banks about how we might be able to achieve that objective.
ROWLAND:
Interesting, before we go, Treasurer, to read reports of a speech, a fiery speech you gave to Labor supporters in WA last week where you talked frankly about the government’s electoral prospects and you said to the supporters, and I’m quoting directly, ‘We don’t have time as a governing party to stuff around on second‑tier issues’. What are these second‑tier issues you’d rather the government not stuff around with?
CHALMERS:
The point that I was making at that gathering last Thursday night in Perth was that the government’s overwhelming focus is on the cost of living, because that is still the main challenge in our economy and in our communities. People are doing it tough even as we’re making progress on inflation. Inflation’s coming down, wages are going up. We’ve got cost‑of‑living relief rolling out. And that’s the main game for us and that’s the point that I was making.
ROWLAND:
Yeah, but what are those? Just for the help of those colleagues, what are those second‑tier issues you’re concerned about?
CHALMERS:
No, my speech was about the first‑tier issue. The first‑tier issue is cost of living and inflation.
ROWLAND:
But you also referenced second‑tier issues. Clearly that sits on your mind.
CHALMERS:
I’m drawing a distinction there, Michael, between the most important thing in my view, which is the cost of living, the government’s major focus, and other issues.
There are always important issues floating around but the assurance that I was giving the Australian Workers Union conference in Perth on Thursday night, the assurance that I give all of your viewers this morning, is that the government is overwhelmingly focussed on inflation and the cost of living, trying to make life a little bit easier for people who are dealing with these cost‑of‑living pressures which have been hanging around for too long.
ROWLAND:
Just finally, another poll out today which is not good reading for the government. Are you genuinely worried, Jim Chalmers, you’ll be part of a one‑term government?
CHALMERS:
I don’t think it’s much use sitting around fretting about that. My job is to try and make the right economic decisions for the right economic reasons and I’m confident that we’ve been doing that. The politics will take care of themselves.
My focus is on the numbers in the economy, not the numbers in the opinion polls. And I’ve maintained that focus throughout, especially when it comes to this cost‑of‑living challenge that you and I are talking about.
ROWLAND:
Okay, Treasurer, Jim Chalmers, really appreciate your time this morning, thank you.