Cash will remain king in the supermarket but not at the bottle-o [Video]

Australians would be able to use cash to buy their groceries or clothes for their children but not a carton of beer from the local bottle shop under proposals being examined to ensure cash remains circulating in the economy.

A discussion paper released on Friday by the government also signals businesses that provide essential goods and services could be allowed to accept a maximum payment in cash, or between certain hours of the trading day.

And firms could face both formal legal penalties from regulators and private class actions from aggrieved customers with the government concerned some businesses may try to impose a surcharge on people who pay with cash.

Amid a collapse in the use of cash – which now accounts for less than 13 per cent of all transactions – and financial turmoil in the …