Remember when cash was king? Some experts say it could all vanish in just three years

Australia could be on the brink of a cashless revolution—but not everyone agrees on what that future should look like.

One leading economist claimed the country could eliminate notes and coins within three years.

But new figures revealed Australians were actually withdrawing more cash than ever before.

Calls to phase out cash and tackle tax evasion

Professor Richard Holden, from the University of New South Wales, argued that phasing out cash would help stamp out tax evasion and deliver billions in extra GST revenue.

The Harvard-educated economist said the black economy was costing the government $10 billion a year and depriving workers of income tax relief.

‘We could transition fully away from cash, I think it could be done in about three years or so—you'd probably start by eliminating the $100 bill and the $50 bill in a year and you work your way through.’

He added that those who used cash to dodge the system were costing honest Australians money.

‘We have very, very high income taxes and if we're leaving several billion dollars a year on the table, by letting tax cheats use cash to evade the taxes the rest of us pay, I just don't have a lot of sympathy for those people,’ he said.

Despite the decline in everyday banknote use, Treasurer Jim Chalmers announced a cash mandate starting in January 2026, which would require businesses to accept cash payments.

‘They're just playing politics,’ Prof Holden said.

‘I'm sure that's been focus grouped to death and that Jim thinks it's a political winner—that's fine, he's a politician, I'm an economist.’

With many banks shutting branches and removing ATMs, Prof Holden suggested Australia Post outlets could offer digital kiosks to help older Australians pay their bills.

‘As far as I'm aware, every town has an Australia Post outlet of some form or another,’ he said.

He dismissed privacy concerns about governments accessing bank records, saying such arguments were more about avoiding the tax office than protecting civil liberties.

‘The government can't just go and get your bank records without the appropriate legal right to do so,’ he said.

‘What are we trying to hide? What's the legitimate purpose of using cash to hide it from the ATO if it's not tax avoidance?’

Cash infrastructure under threat as Armaguard struggles

But his call came as serious concerns were raised about Australia’s fragile cash distribution system.

Michelle McPhee, a Reserve Bank assistant governor, said the country’s near-monopoly cash transport company Armaguard was struggling to survive.

‘We saw cash use take a step level down during Covid and that created significant difficulties for those who distribute cash around the economy,’ she told the Economic Society of Australia.

She explained that servicing far-flung towns with dwindling cash demand was proving costly and difficult.

Armaguard, which controls around 90 per cent of the country’s banknote movements, recently merged with Prosegur and received a $25.5 million lifeline from banks, Coles, Woolworths, and Wesfarme

Cash use falls, but circulation hits record highs

Reserve Bank data revealed just 16 per cent of in-person transactions in 2022 were made using cash, fuelling the debate over its future.

Yet paradoxically, the amount of physical cash in circulation reached record highs, with $104.4 billion worth of banknotes currently in use and $245 million issued in just one week.

Cash withdrawals also surged, hitting $9.2 billion in June

The senior cash coalition

The statistics told a compelling story about who would be most affected by any rapid move to eliminate cash.

One in five individuals aged 65 and older still predominantly relied on cash for more than 80 per cent of their transactions.

These weren’t people clinging to outdated habits—they were Australians with legitimate concerns about digital payments.

Baby Boomers, aged 58 and above, had the highest average savings at $61,232, suggesting they had the financial means to adapt to digital payments if they chose to.

The fact that many didn’t spoke to deeper concerns about privacy, security, and simplicity.

National Seniors Australia became a vocal advocate for cash accessibility, launching a ‘Keep Cash’ campaign that resonated with hundreds of thousands of older Australians.

Their concerns extended beyond mere preference—they included legitimate worries about online scams, system outages during natural disasters, and the basic right to financial privacy.

Just over one-quarter of respondents—regardless of how intensively they used cash—reported that they would experience a major inconvenience or genuine hardship if cash was hard to access or use, according to Reserve Bank research.

For a significant portion of the population, cash wasn’t just convenient—it was essential.

A separate RBA report found only 29 per cent of Australians carried no cash in 2022, meaning the majority still kept notes in their wallets.

Mr Bryce argued this proved ‘that 70 per cent of Aussies carry cash every day’.

Prof Holden, however, maintained that cash was not useful in the kinds of emergencies many thought it was.

‘There's a mass power outage: shops aren't going to be open, supermarkets, convenience stores, nobody opens their shop when the power's out,’ he said.

RBA finds majority of Australians carry cash. Source: Pexels/SHVETS production
Disclaimer: This is a stock image used for illustrative purposes only and does not depict the actual person, item, or event described.

What happens next?

The coming months will be crucial for Australia’s cash future.

Armaguard’s funding runs until December, after which major stakeholders must decide whether to continue propping up cash infrastructure or let market forces determine its fate.

Meanwhile, Treasury is consulting on the cash mandate until 14 February 2025, with implementation planned for January 2026.

This timeline puts the government’s protective measures slightly ahead of any resolution to Armaguard’s crisis.

Professor Holden’s three-year elimination timeline seems increasingly unrealistic given political realities.

No government wants to disenfranchise 1.5 million voters, particularly when many of them are seniors who vote reliably.

The more likely outcome is a gradual transition to a ‘low cash’ rather than ‘cashless’ society, with cash remaining available for essential purchases and vulnerable populations while digital payments continue to dominate everyday transactions.

Would you be ready to live in a completely cashless Australia within three years?