It seems that life is pretty good in Australia. The country’s GDP rate is growing slowly but steadily, and The World Happiness Report ranked Australia tenth in the list of the happiest nations. Also, Australia comes seventh in the ranking of the most cashless countries in the world, behind only Canada, Sweden, the UK, France, the USA and China. Indeed, in 2017, cards overtook cash as the most popular form of payment for Australians, with cards used for 52 per cent of payments, up from 43 per cent in 2013, according to the Australian payments network report. That is to say, Australia will soon live in the cashless future.
Is that good? Well, any champion of the cashless economy will immediately list a minimum of ten reasons why we all should clear our wallets and download a couple of payment apps in addition to these already installed on our smartphones. And, of course, each of the heralds of a banknote-free society will be glad to use Australia as a shining example of a prosperous cashless nation.
However, everyone has their own skeleton in the closet. Strangely enough, the “skeleton” of Australia is related to the increasing share of non-cash payments. Why? Let’s see.
Crime rates are climbing in Australia, particularly in small towns on the outskirts of the country, such as the region of Kimberley or in the town of Ceduna. It’s a long way from Ceduna to Kimberley, but there’s one thing that makes them closer.
A couple of years ago, the Australian government decided to hold a social experiment. They introduced cashless welfare cards in regions, where high level of welfare dependence is found side by side with widespread antisocial behavior, such as alcoholism, gambling and drug abuse. Users of the card cannot withdraw cash from it or buy alcohol or drugs. The entire initiative is aimed at keeping an adverse social environment at bay.
The cashless debit card was launched in Kimberley in April 2016. Ceduna joined the tryout around the same time. And here is the crime rate chart in the Kimberley community of Wyndham since the cards were introduced.
The situation at the opposite end of the country looks very similar. In November 2017, Adelaide now reported that Ceduna has recorded an alarming 23 per cent spike in assault since the Turnbull Government began its cashless welfare card trial. So, what exactly did the Australian government achieve by pushing a part of the population in the bright cashless future?
Prohibition in Australia
An experiment that was something similar to the Australian, was already held almost a century ago on the other end of the planet.
In the early twentieth century, America solemnly went teetotal. It was Prohibition in the United States, or, simply put, dry law. Supporters of the law presented it as a victory of morality and health. It was “the great social and economic experiment, noble in motive and far reaching in purpose” as Herbert Hoover called it.
And here’s what the Australian Prime Minister Malcolm Turnbull said about the Cashless Debit Card program almost a year ago: “This is an exercise in practical love, in compassion”. The parallels are obvious.
We all know how the US “dry” initiative ended. The number of criminal organizations, including the American mafia and various other criminal groups engaged in smuggling, illegal production and distribution of alcoholic beverages (bootlegging), skyrocketed.
Meanwhile, Huffington Post Australia reported in August 2017: “In Ceduna, a couple of community organisations reported that people were becoming prostitutes in order to get access to cash, although the report said there was no evidence that this had increased since the trial began. A worrying 27 percent of those on the cashless cards also reported an increase in being “humbugged” or pressured by friends or family to transfer money from their cards. There are also reports of participants selling their cards in exchange for cash or illicit goods, and taxi drivers and other service providers overcharging them for trips and handing back the rest in cash.”
Prohibitionist supporters in the US blamed the government for weak control and insufficient supervision. Indeed, it was not easy to monitor, simply because the state did not have tools efficient enough. And now?
“We need to manage your money now”
If someone drinks too much, then he can be banned from purchasing alcohol. But how much is “too much”? The government will decide on the amount within a dry law or the Cashless Debit Card program. And so can be banned anything that is important to us. Technically, political will to restrict freedoms exists in any state. Such a decision may be dished up under the pretext of good intentions, for example, combating terrorism, crime, easing payments, fighting tax dodgers and so on. A voter must believe that the state cares about him.
You think you don’t need this? It’s your problem, because the state is going to take care of you anyway, just like the Australian government took care of Crystal Silk, a single mother from Bundaberg. “I come from a working family with a strong work ethic and to be told ‘oh no, we need to manage your money now’, it’s a bit of shock”, she said. “I don’t do any of the things they say everyone’s doing [drugs, alcohol, gambling – ed.] so why is it for everyone when so many people are doing the right thing?”
A simple and clear question arises when looking at everything that happens: Is it worth taking such risks only to get rid of cash? No matter how inconvenient banknotes and coins might seem, their existence significantly reduces possible dangers, preserves established freedoms and is a safety net against the unexpected.
The example of Australia is only one of the proofs of how easily we are led, even against our will. To leave an emergency exit is already becoming not just a whim but a necessity, and that’s why we’d better keep the share of cash in circulation for a rainy day.