SUBJECTS: Cash mandate for essential goods and services; regional banking; credit and debit card surcharges; limiting the influence of billionaire donors on Australian democracy.
ROSS SOLLY, HOST: It's 20 minutes to 9. Andrew Leigh is the Member for Fenner, he's also the Assistant Minister for Competition, Charities and Treasury, Assistant Minister for Employment, and he joins us on the Breakfast Show. Andrew Leigh, good morning to you.
ANDREW LEIGH: Good morning, Ross, great to be with you.
SOLLY: It's great to have your company as well. Look, a lot of talking about this announcement that your government's going to make today. Well, first of all, let's work out what are essential goods and services where people will still be able to pay cash?
LEIGH: Well, Ross, 94 per cent of businesses right now accept cash, and we need to ensure that cash remains a viable payment approach for the minority of Australians who use it for the majority of their purchases. So, this cash mandate is something that's been put in place in other countries; Spain, France, Norway, Denmark, some of the US States have it already. You can think of it as about ensuring that those who are using cash don't get left behind by businesses saying, "We're not taking your cash any longer".
SOLLY: Yeah. We had Kel Watt on the show earlier today from Braddon. He's in charge of ‑ he's one of the business leaders, and he said, "Well, it wasn't that long ago, Andrew Leigh, that we as businesses were encouraged, in fact almost driven to get rid of cash and just to bring in electronic payments. Now we're being told we have to go back again and start accepting cash".
LEIGH: Well, this is for essential purchases, and I think it is important to have that backstop. So, there's 1.5 million Australians who say that they use cash for more than 80 per cent of their purchases, and it's that group that we're looking after. You know, in some sense you can think about this as another aspect of the government's ensuring that inequality doesn't worsen, Ross. We don't want to see that portion of Australians who are still using cash unable to make essential purchases such as groceries or fuel.
SOLLY: Businesses also say there will be a cost associated with this, if you are going to mandate it, that they have to start accepting cash. Will you also provide some sort of assistance for them to make that change for things like floats, handling, security, that sort of stuff, Andrew Leigh?
LEIGH: Well, we're going to work through the appropriate way of implementing this, making sure that small businesses aren't disproportionately hurt. It is important to remember too, Ross, that there can be a pleasure in using cash, not just a burden. And the biggest manufacturer in the ACT is The Mint, which has a wonderful series of new coins, including the Bluey coin, so I'd encourage any Canberran that hasn't been down to The Mint lately to go down and check it out and maybe rediscover some of the joy of cash as well.
SOLLY: Well, that's all well and good, Andrew Leigh, but then if you go in to share that joy of cash with a business who says, "I'm sorry, we don't accept cash" then the joy quickly dissipates, doesn't it?
LEIGH: It does indeed, which is why we're putting in place this mandate today. I mean all payment systems have costs, Ross, as you know, credit and debit cards also charge the retailer, so there's a cost for the retailer in managing payment systems either way. This is simply a backstop ensuring that there's equity and that for essential purchases that people are able to continue to use cash.
SOLLY: So just on essential purchases, a lot of people have contacted us to say, well, it would be good if some governments led from the front, for example, Access Canberra here doesn't accept cash. You can't pay cash when you're riding on public transport, you can't pay cash for so many other services that are provided by the government. Do you think the government should lead from the front on this, Andrew Leigh?
LEIGH: Those things are going to be a matter for the ACT Government, Ross. Certainly, it will be part of the consultations as to where the scope of essential services sits. But the announcement from the Treasurer and the Assistant Treasurer really is about looking after some of the most vulnerable in purchases around groceries and fuel, where we've heard that there's some of the biggest pressure points.
SOLLY: A lot of people complaining today as well on the text line, as they always do, Andrew Leigh, when we start talking about people having to use credit cards, the fees that get attached to it. First of all, do you think that shops are doing the right thing in regard to how much fees they charge? Should there be more of a mandate in that area, and do you understand now why people are getting frustrated using credit cards or plastic when they are getting slapped with these extra fees?
LEIGH: Oh, absolutely, and that's why Stephen Jones came out on the front foot in terms of credit card surcharging the week before last, I think it was, looking to phase out the debit card surcharging and to deal with credit card surcharging as well. I know it's been an enormous frustration for many card users feeling that their payments are being eaten up, and it's also a big issue that I hear back in conversations with small businesses, in saying that they're paying too much and that they're not getting the same deal from the credit card companies that their bigger competitors already get access to.
SOLLY: Yeah. In terms of the shops being mandated to do it, supermarkets, your small little IGAs, Manuel Sirakis contacted us early on to say, well, you know, it's not a fair deal at the moment when it comes to the smaller supermarket providers where, you know, they cannot have the same rules as the supermarkets when it comes to using cash, et cetera. Does there need to be a re‑working of the rules there, Andrew Leigh?
LEIGH: Well, these are things that we're working through the Excessive Surcharging Review, we're looking at expanding the Reserve Bank's power to regulate new payment technologies and committing money also to deal with scams. The payment system is very complicated, Ross. We're talking about a range of aspects today; the cash aspect, debit cards, credit cards, what gets charged to the individual, what gets charged to the business. Fundamentally our framework on this is we want to get more competition, and we want to make sure that consumers get a fairer deal, and that's what's driving our reforms right across the payment system.
SOLLY: One other question on this. The frustration people are having to access banks, you know, local branches are closing down everywhere, Andrew Leigh, it's all well and good if you're a shop owner and you now must take cash mandated by the government, but then you have to actually find a bank to be able to deposit the cash, et cetera, and that is becoming a problem; this is something which small businesses are also highlighting could be an issue.
LEIGH: It certainly is, and when I was on the House Economics Committee, I made it a practice every year when we quizzed the big bank CEOs of asking them how many bank closures had happened under their watch, and there was just that steady trickle away from regional areas. Yes, people can use Australia Post, but that's often under pressure as well. So, we do need to make sure that banks are providing those vital branch services that many people rely on, and this is particularly an issue for older Australians, Ross, who I think tend to be more inclined to use the in‑person services rather than just do all their banking online.
SOLLY: So, what are you going to do about it, Andrew Leigh, how are you going to make banks keep their branches open?
LEIGH: Well, we haven't announced precisely the way forward. We've certainly said that this is an issue for us, and we're working constructively with the banks to make sure that those branches are kept open, particularly in regional areas where they're very much under pressure.
SOLLY: And a texter wants to know, and this was going to be my last question on this, "I wonder if the government has considered the tax evasion from these businesses when we pay cash. I already find small businesses when you go in there openly asking for cash, so they don't have to pay GST. I really wonder if the Labor government has had enough thought about making sure that GST will be paid. It seems like they're just looking for some cheap votes because they know they're not going to win the next election".
LEIGH: No, this is about looking after vulnerable Australians. But the issue of cash use within the shadow economy is a serious issue. My friend and former colleague Richard Holden has a nice book Money in the 21st Century where he makes the case that a disproportionate share of cash is being used for illicit activities. So, we're focused on that at the same time, providing the resources that the Federal Police need in order to crack down on organised crime while not shutting out vulnerable Australians from the ability to continue to use cash for essential services.
SOLLY: It is 12 minutes to 9 on ABC Canberra Breakfast. My guest is Andrew Leigh, the Member for Fenner, and also Assistant Minister for Competition, Charities and Treasury. Just on another issue. We were talking earlier this morning, Andrew Leigh, with Jessie Price from the Voices of Bean - that's the campaign to have an independent candidate running at the next election against your colleague David Smith, lamenting the fact that the new laws that you were talking about bringing in regarding donations towards political parties will benefit the big parties like yourselves, and the Liberal Party, but the smaller groups will find it very hard to try and match and to battle against the bigger party. What's your thoughts on that? Will the new legislation rule out the possibility of Teals in the future or make it harder for Teal candidates?
LEIGH: Ross, right here in the ACT we've already got spending caps, and that didn't stop two independents getting elected at the last ACT election. I think that clearly proves that independents can compete in an environment with spending caps. But the notion that we just continue to allow Australian democracy to be up for sale to the most deep‑pocketed donor just isn't sustainable. The arms race of fundraising, the disproportionate power that billionaires are able to exert on a system with no spending caps ought to be a concern for anyone who values the health of Australian democracy.
SOLLY: Isn't it right though under the way the current system works that the parties that attract the most votes, Labor and Liberal, will get more money allocated towards their election campaigns than the smaller parties, so you will have an unfair advantage over some of these smaller parties.
LEIGH: I don't think there's anything unfair, Ross, about a system which says the amount of government funding you get is proportionate to the number of votes you get. If independents and smaller parties get more votes, they'll get more government funding. That's the way the system works now, and that won't be changing.
SOLLY: Well, yeah, I hear what you're saying, but it's an uneven playing field from the start, from the get‑go though, isn't it, 'cause you're basically saying, "Well, if you want to run" ‑ if Climate 200, for example, wants to run candidates, "You just have to deal with this cap, but we, the big parties, we're still getting a guaranteed big slice of the money because we get more votes".
LEIGH: Nothing's guaranteed, Ross. There's funding that flows based on the number of votes. It's not the number of votes ‑ the funding for the 2025 election won't be based on the previous election. The per vote funding will be based on how people do in the 2025 election. Spending caps have worked here in the ACT. I think we're a thriving, healthy democracy, and I don't see any reason why that approach can't be successful at the national level in trying to make our democracy stronger and healthier. Australia has an extraordinary tradition of democratic reform, from the secret ballot to universal voting, all these things have really made our system stand out, and I don't think we should be afraid of continuing to innovate, to keep the democracy as healthy as possible.
SOLLY: All right. Final question. This is from a listener, Dick in Curtin wants to know, "Could you ask Andrew why some businesses charge for credit cards and debit cards and others only charge for credit cards?" Do you know the answer to that, Andrew Leigh?
LEIGH: Yeah, I mean it's certainly a decision that the businesses have made, but this is why my colleague, Stephen Jones, has announced an intent to phase out debit card surcharging by 2026, because while you might understand some requirement for a surcharge in the case of a credit card, it's more difficult to understand the rationale in the case of a debit card where the money's coming straight out of your account.
SOLLY: Andrew Leigh, we'll need to leave it there. I appreciate your time this morning. Thank you.
LEIGH: Thanks, Ross.
ENDS