The Treasury has discreetly unveiled draft regulations aimed at implementing a cash mandate for essential goods, a move that proponents of cash usage have criticized as providing a “series of loopholes” for businesses.

The nine-page draft, released quietly late on Friday, stipulates that grocery and fuel retailers must accept cash payments up to $500.

However, smaller enterprises, defined as those earning less than $10 million annually and comprising 97.2 percent of all businesses according to the Australian Bureau of Statistics, will not be subject to this mandate. This exemption includes small grocery and fuel retailers.

The Treasury acknowledged that smaller businesses face greater challenges in handling cash transactions.

Meanwhile, larger grocery and fuel retailers required to comply with the mandate may still seek exemptions if they can demonstrate exceptional circumstances.

“The mandate will apply to fuel and grocery retailers as this will best meet consumer expectations to be able to pay for essential goods in cash, while minimising the costs and risks to businesses,” Treasury said.

“This is a balanced, practical, and sensible step to support cash users and give consideration to businesses.”

The essential goods included in the draft regulations stripped-back some of the goods envisaged to be included.

Late last year, Treasurer Jim Chalmers said the list of essential goods being considered for the cash mandate included food and drinks, medicines, medical and dental services, children’s clothing and shoes, petrol and vehicle servicing, and utility bills.

Treasury noted that utility bills were not included in the draft regulation as people can still make cash payments via Billpay at Australia Post.

Cash advocate Jason Bryce said this was not what was promised to Australians and excludes some essential goods and services needed to live, particularly medicine.

“The cash mandate is not so much a mandate as a series of loopholes,” he said.

“This mandate will not protect the role of cash in Australia. This mandate will help businesses to reject cash. It exempts so many businesses.”

Bryce is one of many Australians petitioning to ensure cash remains a viable payment option, with elderly and regional and remote people believed to be most affected by the growing move to digital payments.

The latest Reserve Bank of Australia data showed that 13 per cent of all payments are made with cash compared to 76 per cent made with card.

But an estimated 1.5 million Australians still use cash to make more than 80 per cent of their in-person payments.

Bryce labelled the draft regulation as a win for the big banks.

“There’s nothing wrong with paying with your card, but it benefits the banks. They make a profit out of every time we tap and they profit from the data they collect from us,” he said.

”Cash is not necessarily more expensive, but they’re making it so it’s not viable for most businesses.”

The proposed mandate would begin on January 1, 2026, and continue for three years.

Then, the government will review the mandate to ensure it is effective, consider whether it should be expanded and assess the impact on businesses.