The Albanese government has put a use-by date of 2030 on the Australian cheque system, with the issuance of bank cheques to end in 2025 and personal cheques in 2027.
A consultation paper released by Treasury on Friday said there would be an orderly transition, with all efforts made to support remaining cheque users and minimise disruption.
Government agencies and departments that still use cheques will have to start developing transition plans. The government said it would support industry in promoting the use of alternatives to cheques and work with state and territory government to co-ordinate the transition. And it will amend legislation that includes references to the use of cheques.
There has been a decline of around 90 per cent in the use of cheques in the past decade. As use has declined, the cost of processing a cheque has kept going up.
The transition will be completed in stages, with the issuance of bank cheques ending in 2025, the issuance of commercial and government cheques ending in 2026 and the issuance of personal cheques in 2027.
By the end of 2028, personal, commercial and government cheques will no longer be accepted.
By the end of 2030, bank cheques will no longer be accepted and the system will be closed. The Cheque Act will be repealed.
At its peak in the 1980s, cheque use accounted for 85 per cent of non-cash payments. In the 2022/23 financial year cheque payments accounted for 0.05 per cent of the value of retail payments.
The Treasury paper estimates that the cost of processing a cheque is now more than $5.
Some countries have already closed their cheque systems. They include Belgium, Denmark, Finland, Ireland, Kenya, Malta, Netherlands, New Zealand, Poland and South Africa.