TOM ELLIOTT:
So, at the start of the programme today, we spoke about the new policy of the federal government to preserve a role for cash in our economy. They also want to get rid of cheques in a few years’ time. Our next guest is the federal Treasurer of Australia, Jim Chalmers. Good morning.
JIM CHALMERS:
Good morning, Tom. How are you?
ELLIOTT:
Good, thank you. So, look, I’ve read your release, but if you could just explain for us. As I understand it’s medium and larger businesses that sell essential goods and services will have to accept cash. Is that it?
CHALMERS:
Spot on. We’re making sure that people can pay cash for essential items if they want to or if they need to. And that’s because we recognise even when most of your listeners would be going towards digital payments, there’s still about 1.5 million Australians who do most of their spending with cash, more than 80 per cent of their spending with cash. So, we want to make sure that people aren’t left behind. We know this is an issue which is of concern to people. We know cash can be a lifeline; we know it can be a really good backup. We know that it gives people peace of mind and a bit of a sense of security and so it will have an ongoing role in our economy on our watch.
ELLIOTT:
Now, when we say essential goods and services, like, you know, supermarkets, petrol stations, that sort of thing, but I mean, clothing that’s essential or housing, I mean, where do you draw the line about what is essential and what is not?
CHALMERS:
We’ll do a bit more work to work out where it’s best to draw the line. But I think some of them are obvious, some of those ones that you just mentioned: petrol, obviously, groceries, pharmacy, probably healthcare, those ones kind of pick themselves. But we’re going to do a bit more work now that we’ve made this announcement. We’re definitely going to guarantee a role of cash, we’re definitely going to do it for essential items, and we’ll do a bit more work to make sure we get the definition of essential right.
ELLIOTT:
I read the other day that Armaguard, which is the last cash transportation business, is sort of only got funding for another year. Are you going to have to do something to preserve it? Because if you can’t move large amounts of cash around the country in a secure manner, then, I mean, cash will die a natural death.
CHALMERS:
Yeah, a big part of the focus. We’ve already been working with Armaguard, with the banks and others. That was a deal that the banks did with Armaguard not that long ago to extend that service and to buy themselves time to work out a more permanent solution. But what we’re proposing today is complementary to that. We know we’ve got to get cash moving around communities. We’re particularly focused on making sure regions can access cash and that people can use cash in the regions. We want to make sure we carve out small businesses so we’re not putting too much of an impost on them. So, a little bit of work to do still. But what your listeners need to know is that there is a role for cash. We’re very committed to it. You should be able to use it to pay for essential items and that will be the case.
ELLIOTT:
What about credit card and debit card surcharges? I know that’s not part of this, but it seems to me that if a business doesn’t take cash and legitimately, they can do that, they should have at least one fee‑free method of payment. Would you consider saying that maybe debit card transfers should be fee‑free?
CHALMERS:
We are looking at that. We are prepared to actually make that change. We’re working with the Reserve Bank, which looks after that part of the payment system. But we said maybe a month or 2 ago that we want to make that change. We don’t think people should be paying big fees to, to use their own money. That’s another one of the steps that we’re taking in addition to what we’re talking about today with cash.
ELLIOTT:
Now, a couple of months ago, I had a small and only minor operation, and I got a rebate from the Reserve Bank of Australia on behalf of Medicare. I think it was for $300 or something, which I then had to give to the surgeon. I don’t know why they sent it to me, but it was a cheque. Now, will that soon become a thing of the past?
CHALMERS:
Yeah, we’re going to try and wind them up too. So, there’s a lot of government cheques and that’s part of the challenge here in winding these down. We said a little while ago that we’re going to modernise the payment system, recognising more and more people like digital, but we don’t want to leave people behind. We’re going to phase out cheques but over a long period of time. So, you’ll still be able to issue a cheque until the middle of ‘28, still be able to cash a cheque until the middle of ‘29. So, a really long run‑up. They’re down about 90 per cent over the last 10 years. But a lot of them still in the system are government cheques, and we’re going to wind them up too, but over a long period.
ELLIOTT:
So, does that mean direct debits instead?
CHALMERS:
Yeah, there’s more and more of that and people like that. But a lot of people, at least 1.5 million that we know about, want to be able to use cash. Some people will want to make sure that they can transition away from cheques over a reasonable time period. And we’ve tried to be really accommodating there so that people have got lots of time to make different arrangements.
ELLIOTT:
And look, finally, the Suburban Rail Loop here in Melbourne, it’s very important to Victorians, probably less so for other states. But I think the last time you and I spoke; you said you hadn’t got the final bit of the business case to authorise $2.2 billion of federal government money. Now, I read late last week that you or your department has, in fact, been sent that by the Victorian Government. Does that mean that the 2.2 billion will now be paid from the federal government to the state government?
CHALMERS:
It means we’ll work through it. We don’t come to an instant judgment on those sorts of things. If it’s just been supplied to us, then we’ll do the usual kind of diligent, methodical, considered work. But we believe in the project. We think it’s got a lot of potential. That’s why we made that capped contribution of $2.2 billion towards the early works. We said it was subject to a range of conditions. We said Infrastructure Australia was going to look at it. If some of that material has been provided, that’s great. We’ll go through it in a diligent way.
ELLIOTT:
Thank you for your time. Jim Chalmers there, federal Treasurer of Australia.