Sneaky trick young Aussies are ditching
YOUNG people are rapidly ditching the "under the table discount" mentality as a result of a "cultural shift" away from carrying cash, the Australian Taxation Office says.
Research commissioned by the ATO into consumer preferences around payment methods has revealed that only one in five Australians still prefer using cash for purchases, with the trend particularly evident among people under 35.
Those aged 18-24 are also half as likely to request a discount for paying in cash compared to the general population. ATO assistant commissioner Matthew Bambrick said it was "clear that there's been a cultural shift towards cashless payments across the board, even for smaller amounts".
"For over $50 you're looking at more than 76 per cent of people prefer electronic payment," he said. "Over $250, it's more than 85 per cent. Even for the morning coffee, under $5, it's now almost 50 per cent [because of] tap-and-go, contactless payments."
The survey of 1049 respondents by research firm Colmar Brunton found 10 per cent of consumers carry no cash at all while 30 per cent carry very limited cash and expect to use electronic payments for nearly all their transactions.
Nineteen per cent said they carry some cash but will generally use it only if electronic payments aren't available, while 27 per cent said they carry some cash and use a combination of cash and electronic payments.
Just 14 per cent said they prefer to pay for things in cash wherever they can.
"Those under 35 are carrying less than half the amount of cash those over 55 are carrying, but it's falling across the board," Mr Bambrick said. "It's usually around convenience and security. Businesses who are doing contactless payments, they also find it quite convenient as they don't have all the cash handling costs."
Mr Bambrick said where "we once saw people walk into car dealerships with cash in hand, cash has now been relegated to the morning coffee", and that the "move by the younger generation away from seeking an 'under the table' discount is really encouraging".
"It indicates that a once common practice is now rare as people enjoy the benefits of being cash free," he said.
Mr Bambrick said 86 per cent of businesses agreed that most customers expect to be able to pay via electronic means, and the research indicated the "trend away from cash will only gather pace".
"This is more than a passing fad," he said. "This is the way of the future. Particularly with the decline in minimum transaction amounts, we are likely to see more and more people carrying little or no cash at all. Most businesses already know this and we expect the rest will be there soon."
The latest research bolsters the federal government's crusade to crack down on the $50 billion "black economy". In last month's Federal Budget, Treasurer Scott Morrison gave the ATO an extra $320 million to fund the work of the Black Economy Taskforce.
From July 1, 2019, cash payments of more than $10,000 will be banned. "This will be bad news for criminal gangs, terrorists and those who are just trying to cheat on their tax or get a discount for letting someone else cheat on their tax," Mr Morrison said in his Budget speech. "It's not clever. It's not OK. It's a crime."
Reserve Bank data shows Australian consumers have rapidly embraced electronic payments, with credit and debit cards combined overtaking cash in 2016. Cash payments have fallen from 69 per cent of individual transactions in 2007 to just 37 per cent in 2016
In 2016, when Finance Minister Kelly O'Dwyer floated the idea of ditching the $100 note to crack down on organised crime, the RBA came out in defence of Australia's highest-denomination banknote.
Mr Bambrick said the ATO wasn't making any judgments about when cash should or shouldn't be used. "Cash is a legitimate means of transaction," he said. "[This research] is about what's happening, what people prefer and where the trends are going, it's not about what the ATO prefers."