The Federal Government is preparing to introduce a cash mandate, but Member for Calare Andrew Gee says it doesn’t go far enough.

The draft regulations require fuel and grocery retailers to accept cash for purchases of up to $500 from 1 January 2026, but there is an exemption for small businesses.

“With respect, it's a dud,” Mr Gee has said of the proposal, raising the matter in Question Time in Parliament.

“It's the green light for the phasing out of cash in Australia.”

Mr Gee instead called for support of his private member’s bill, which would apply to all businesses, and all face-to-face transactions up to $10,000.

Responding in Parliament, MP Jim Chalmers said there were good reasons the government had settled on the model, but said they were taking the issues Mr Gee had raised seriously.

“There is currently nothing preventing any business in Australia from refusing to accept cash and we consider that situation to be unacceptable,” he said.

“That is the status quo that we've inherited. That's the status quo that we are changing, because we know that cash still plays an important role in the lives of many Australians.”

Mr Chalmers referenced Reserve Bank findings from 2022 that about seven per cent of Australians still used cash for the majority of in-person purchases overall – but acknowledged that the majority were older Australians and those living in rural and regional communities.

“From 1 January, we're ensuring that Australians can buy their fuel and groceries by mandating cash acceptance for essential purchases through a mandatory industry code under the Competition and Consumer Act,” he said.

“This follows extensive consultation. Earlier this year, we received 61 submissions from organisations and 4,000 from individuals, and we met with a range of organisations about it.

“We know that there's a balance to be struck here between ensuring that Australians can use cash to pay for essentials and not placing unnecessary burdens on small businesses, particularly small businesses in the regions.

“After that extensive consultation, we think that we've got the balance right.”

The government has also committed to reviewing the mandate after three years and considering then whether it needs to be expanded.

Consumers already have the option to pay their bills, including utilities, phone bills and council rates, in cash at their local Australia Post outlet through Post Billpay on the current terms of this service.

Billpay is available at post offices across Australia and is relied on by businesses and government agencies, including utility providers and government entities across local, state and Commonwealth levels.