Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I thank the Deputies for bringing forward this important and interesting proposal on the protection of cash in the financial system. I listened to the contributions which were interesting. The Deputies were thinking about people being excluded from the financial system and people who do not have access to cash and where the only option is to make an electronic payment and for one reason or another people do not have access to that. Deputy O'Donoghue referred to people losing tips and I certainly see that a lot in daily life. A lot of deliveries are happening and people have less cash in their pockets and those who need it most are not receiving tips. I am not sure I agree that tips should not be taxed or how the taxation system should work on that. We need to work that out as well.

On the point that cash is part our culture, there may be different attitudes in different age groups. I spoke to my father about this recently and he felt very strongly that cash should still be accepted. When credit cards were first introduced I remember thinking it might be possible not have cash at all. I remember asking my father about that. His reply was that if we got rid of cash people would stop believing in money. Cash is tangible and there is something there that one can see because the entire financial system is based on faith and belief. The reason we accept pieces of paper or metal discs in exchange for our labour is because we have faith that somebody else is going to accept those in turn. Second, we have faith that is not going to be devalued by the Central Bank printing too much of it. Perhaps it is harder to maintain that faith if everything is happening in a electronic world.

There was a retail banking review and one of the recommendations that came of it was that there should be a national payments strategy - in other words, a strategy that determines what types of payments should be accepted and in which circumstances. This strategy will consider legislating that the Minister for Finance may legislate to have the power to require that classes of firms, sectors or sub-sectors should accept or facilitate the acceptance of cash. We also need to determine whether it should be Government policy that public bodies should accept or facilitate the acceptance of cash for the payment of goods, services, levies, fees and charges. That is to be determined by 2024. As Government supports the policy intent behind the motion put forward, and because it is consistent with Government policy, we are not opposing it.

How citizens engage with and access banking services has changed rapidly in recent years. This is due to technological development and also as a result of the Covid 19 pandemic. However, despite the decline in the use of cash and visits to bank branches, many people want to keep the option to pay in cash even if some have a preference for digital as a means of payment. These developments are reflected in the motion put forward by the Deputies and I strongly agree that action is needed in order to facilitate access to cash in Ireland.

I thank the Deputies for their acknowledgement of the work of the Department of Finance on the recent retail banking review, published in November 2022. The review recognised that the Government and the Central Bank, in line with the ECB's cash strategy, have a fundamental responsibility, together with the banking sector, to ensure the smooth supply of cash and to facilitate the use of cash in payments by consumers and SMEs.

Government policy must, therefore, support the development and maintenance of a sustainable and resilient cash system for as long as cash is needed. This review has made a number of recommendations that aim to ensure good access to cash for consumers and businesses as well as protecting the resilience of the cash system. I agree that legislation and an enhanced role for the Central Bank are needed to achieve this objective.

While the Government supports the general policy intent of this motion, there are some statements that the Government does not accept and there are proposals that are unrealistic or premature. Government already has a concrete policy that supports the development and maintenance of a sustainable and resilient cash system for as long as is needed. That is thanks to the approval of the implementation of the recommendations of the retail banking review to prepare legislation on protecting access to cash, supervising ATM operators, and authorising and supervising cash in transit firms.

The call to ensure that the use of digital payments methods is voluntary and not mandatory is premature because the retail banking review specifically highlights that the issue of acceptance of cash, including by public bodies, should now be considered in the preparation of a new national payments strategy. This is the correct forum to consider this very complex issue as every effort should be made to avoid unintended consequences. The new national payments strategy is going to be completed next year. The call on Government to, without delay, develop access to cash legislation is superfluous, because in line with the recommendation of the retail banking review, the Department is already working on the heads of Bill for this important legislation. My colleague the Minister for Finance, Deputy Michael McGrath, will bring the heads of Bill to Government before the end of this year to seek approval to draft the Bill and to submit it for pre-legislative scrutiny to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach.

The call to have this legislation drafted, considered by the Oireachtas and enacted before the summer recess is simply not feasible. It is a difficult and complex task and it needs adequate time and consideration.

The motion calls on the Government to instruct all Irish banks and banks that operate within this jurisdiction to provide reasonable access to cash, allowing for the further evolution of the cash infrastructure be managed in a fair, orderly, transparent and equitable manner for all stakeholders. It will ensure that all retail outlets and businesses, together with consumers have access to cash services. The motion also calls for the Government to categorically state and instruct, via the Central Bank of Ireland and the Minister for Finance, that all retail banks must preserve consumers' and businesses' access to cash services pending the development of the access to cash legislation. The Minister for Finance has no power to do this, as there is no current legislative basis under which the Government could issue such an instruction. However, the review and the Government have called on banks to maintain the existing cash infrastructure pending the passage of the access to cash legislation. This has already put the sector on notice that any reduction in access to cash services would then have to be rectified when the legislation is enacted.

The objectives of the motion and Government policy are closely aligned. We are working on putting in place a robust framework to govern further changes in the cash system. Further developments must be managed in an orderly, transparent, and equitable manner. It is important that future reductions to the cash infrastructure do not outpace the needs or expectations of society. This is a complex and wide-ranging matter. It deserves adequate time and consideration. I welcome the opportunity to discuss this matter today and I thank Deputies for bringing forward the motion.

See this speech in context