Monday, September 26, 2011

The cashless society... the paperless office: we're rolling in it

Cash on hand

We’ve more than ever before

Cash per person June 2011

6.5 $5 notes
4.5 $10 notes
6.2 $20 notes
21.4 $50 notes
9.4 $100 notes

Forget the talk about a move to a cashless society. We’ve more of it than ever before

The latest figures show we had on hand or on demand at banks and shops a record 212 million $100 notes in June and a record 486 million $50 notes. We have more notes of every denomination per person in circulation than a year ago, and far more than before the financial crisis.

While Australia’s population is growing at an annual rate of 1.5 per cent, our use of physical cash is climbing 2.7 per cent.

On average we have access to around six-and-a-half $5 notes per person, up from six. We are able to lay our hands on four $10 notes and six $20 notes, each up slightly from the year before.

But the biggest growth is in our holdings of $50 and $100 notes, each of which jumped during the crisis and didn’t fall back. Three years ago we each had access to 19 $50 notes. We now have 21. Three years ago we each had access to eight $100 notes. We now have nine. On average each of us has access to $254 more in cash than we did three years ago.

Our love affair with cash moved into high gear with the introduction of the goods and services a decade ago... notwithstanding claims made at the time that it crack down on the cash economy. We went from roughly equal numbers of $100 and $20 notes to a ratio of eight to six, which widened during the economic crisis to nine to six.

Reserve Bank figures suggest most of the $100 notes rarely see the light of day, perhaps living in briefcases or under floors. The average $20 note lasts 12 years before becoming damaged and being replaced. The average $100 note should last 70 years.

An increase in the GST of the kind some want discussed at the tax summit could push up our use of cash further.

The other driver is our growing practice of using eftpos machines to withdraw cash as we swipe at supermarkets. We took our cash a record 22.7 million times in the past financial year, up one million on the year before.

Published in today's SMH and Age

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