The banking industry is pushing for new laws to ensure the preservation of cash distribution and the increasingly small industry responsible for it to pass this fortnight. The legislation is designed to build on the recent cash mandate and ensure the sustainability of the industry that moves physical money around the country.
Chris Grice, the CEO of National Seniors Australia has been one of the most vocal proponents for the availability of cash, particularly maintaining its distribution to rural and regional parts of the country. “When you consider that Armaguard deliver 90 per cent of the cash around the country, that really is a substantial risk to the community,” he told Yahoo Finance.
“It appears the way it’s working at the moment is just not tenable.”
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As cash use has fallen precipitously in recent years, the sector providing its distribution has become highly concentrated and the economics of the business have become increasingly challenging, leaving Armaguard in a precarious financial position.
The bill will establish greater regulatory oversight of the industry by the consumer watchdog the ACCC, including the prices it charges for its services, and also includes crisis management and resolution powers that could allow the RBA to intervene and resolve major disruptions to the network if the system is at risk of collapse.
Under the proposal, the RBA could access $400 million to operate Amraguard in a crisis.
Armaguard executive Peter Fox, during a Senate committee hearing last month to examine the bill, labelled the emergency powers “absolutely ludicrous” and an “outrageous affront” over concerns the company could be nationalised by stealth.
The company’s major customers – the supermarket giants Coles and Woolworths, the Big Four banks, Wesfarmers and Australia Post – previously provided about $100 million in support to bolster Armaguard, but that deal ended in June.
Linfox-owned Armaguard, which has been operating at a loss, wants to see the banks contribute more to support the cash distribution system.
New laws ‘a crucial safety net ‘
On Wednesday, the CEO of the Australian Banking Association, Simon Birmingham, said the Cash Distribution Framework Bill 2026 and related legislation ought to pass the Senate this fortnight.
“Cash remains an important payment option for many Australians, particularly in regional and remote communities. These Bills provide a crucial safety net to ensure cash can continue to be distributed reliably and affordably across the country,” he said.
Read More: Banks push for new cash distribution rules to pass as system ‘just not
