Cash Distribution Framework Bill 2026, Cash Distribution Framework (Consequential Amendments and Transitional Provisions) Bill 2026
Mr SOON (Banks) (12:03): I'm pleased to rise in support of the Cash Distribution Framework Bill 2026 and the related legislation before the parliament. The bill's aim is to ensure that Australians continue to enjoy access to cash for as long as they wish to use it, and it complements previous government actions in this area. In 2025, the Reserve Bank found that roughly 10 per cent of Australians still use cash for most of their purchases, and around 15 per cent of payments were still made in cash.
Cash plays an important role in promoting economic inclusion, supports the resilience of payment systems and acts as a store of value that is particularly useful in times of uncertainty. Furthermore, the positive effects are most pronounced in regional areas and lower-socioeconomic communities. However, the decline in transactional cash use is not only putting pressure on these functions; it is also making the economics of storing, processing and transporting cash around the country harder, especially in the communities that need it most, where the tyranny of distance dries up the associated costs.
The government is committed to safeguarding Australians by ensuring continued access to cash and recognising its essential role in our society in law. That is why the government introduced the cash acceptance mandate, which came into effect on 1 January this year. It is enforced by the ACCC and requires major grocery and motor fuel retailers to accept cash for everyday transactions of $500 or less during regular business hours.
This is a commonsense measure that protects small businesses by exempting those with a turnover of less than $10 million, unless they share a trademark with a larger retailer. While the cash acceptance mandate is working as intended, we need to ensure that no-one is left behind in the payment system. With the introduction of the Cash Distribution Framework (Consequential Amendments and Transitional Provisions) Bill 2026, the government is taking the next step and delivering on its commitment to maintaining cash for as long as Australians want to use it.
At its core, the bill before the House establishes a legislative framework to regulate cash distribution services in Australia to ensure that critical providers can operate fairly and with transparency within a sustainable, resilient and efficient sector. It also introduces a crisis management and resolution regime for cash distribution services, which are critical to the availability of cash in Australia.
The framework will also support the long-term sustainability of the cash distribution system, ensuring that cash is available for those who need or want to use it. Australia's landscape can heighten the challenges of ensuring that communities in regional and remote Australia continue to have access to services provided at a reasonable price. The bill before the House seeks to address this problem by allowing for the creation of ACCC approved 'standard terms'.
These standard terms will cover both services and pricing, ensuring that customers of cash providers are given a simple baseline while not precluding them from negotiating a stronger deal themselves where possible. Further, the bill will require cash providers to negotiate in good faith with terms that are fair, non-discriminatory and transparent. During the transition period to the new framework, the Reserve Bank will have heightened powers to direct designated entities in relation to cash distribution services.
These additional powers are designed to be used swiftly when needed while regulators establish longer-term settings. The formulation of the long-term settings will be aided by provisions in the legislation before the House. Appropriate pricing that considers the various commercial and geographical challenges inherent to this industry is crucial to ensuring the long-term health of the sector.
The reporting and record keeping requirements for cash providers in relation to service and access agreements will help ensure this. Importantly, the ACCC will also have the power to establish mandatory minimum service level standards, and input from the public will help shape these standards. Further, the bill contains important provisions to ensure continuity of service during crisis events through the frameworks, crisis readiness and resolution powers.
The framework specifies various circumstances where the Reserve Bank can step in to exercise resolution powers in relation to any service provider that they have designated as crucial to the cash distribution system, including instances where a particular entity becomes insolvent, enters administration or seeks to reduce or cease their crucial services. The resolution powers include direction powers, the ability to appoint a statutory manager and powers of compulsory transfer.
The bill also provides for moratoriums and stays, suspensions of termination rights and, if required to address the particular crisis event, temporary government funding. These powers are a standard feature of crisis resolution frameworks in the financial sector. Such powers are necessary to enable a rapid regulatory response when the supply chain that so many Australians rely on for access to their own money is stretched.
Finally, the bill has an impact on bank branches and bank closures. The framework is an important element of ensuring that regional bank branches can access cash on fair and transparent terms and at a reasonable price. Such a move will support the viability of bank branch networks in regional and remote areas of Australia but also in my electorate of Banks.
However, this is not the only action the government is taking to ensure continued access to banking services in regional and remote communities. In February last year, the government secured a commitment from Australia's major banks to not make any further closures in regional areas before 31 July 2027, and one bank has subsequently extended its moratorium until 2030.
The government has also secured new and increased commitments from the banks to Bank@Post services. While post office closures are a problem all of their own, the availability of Bank@Post as a service provides wider choice and greater certainty to consumers that cash will be available to them. While this is all welcome news, there is more work to do and the government is continuing to work hard to develop long-term solutions that support access to essential banking services in regional communities.
The issue of access to cash and in-person banking services is one I've spoken about previously in the Federation Chamber. Indeed, the effects of bank branches closing and cash becoming less readily available are well known to many of us in this House. The Hawker inquiry into the level of banking and financial services in regional and rural communities outlined these issues quite clearly back in the 1990s.
Federal inquiries and research by academics have come to the same conclusions: lower access to cash and banking services has profound negative social impacts, including socioeconomic marginalisation and financial exclusion. Research out of the United Kingdom from only a few years ago, prepared against the backdrop of proposed legislation to protect access to basic banking services, indicated that the closure of bank branches was entirely eliminating access to cash and financial services in some communities.
In regional communities, the effects are also devastating for small businesses and local economies. When people travel to larger regional centres to do their banking, they do their shopping there as well, taking their business and money out of their local communities, much to the despair of those local businesses. The same challenges can be observed in metropolitan areas at a smaller scale.
Of the 26 suburbs in my electorate, only two still have a bank branch. While it might not be universal, the closure of bank branches and post offices drives a large section of consumers to larger suburban centres. This harms the business ecosystems everywhere outside of these larger suburban hubs.
While it might not be possible to integrate social licence into legislation, it is something that financial institutions need to consider. The ongoing acceptance and approval of a business and its practices from the community and other stakeholders is an often unseen and underappreciated element of business success. The legislation does not exist in isolation.
As mentioned, the government has instituted a cash acceptance mandate, but we are also ensuring that Australia has a stronger payment system across methods. Following the RBA surcharging review, surcharges on debit and credit cards will end from 1 October this year. While surcharging was intended to encourage consumers to use cheaper payment methods, it is no longer achieving this goal, not least because avoiding surcharges has become almost impossible.
The government also recognises that the fees paid by businesses for card payments are too high. To begin remedying this problem, the maximum interchange fee will be lowered. This will reduce card payment costs, especially for our small businesses.
This follows previous government action to stop passing on surcharges from the Tax Office and Services Australia and to ensure these everyday payments don't cost Australians more. The government has also instituted a plan for the orderly winding down of Australia's chequing system. While fewer than 0.1 per cent of retail payments in Australia are made with cheques, a rapid industry exit has the potential to disrupt both consumers and industry.
The government's plan provides certainty as the system is gradually phased out in September 2029. As payment methods change, the government is making sure the system works for everyone, not just those who can easily move away from cash and towards digital alternatives. This bill keeps cash available for the people and businesses who rely on it the most while building an altogether stronger and more resilient payment system for Australia, for our country, including for my great electorate of Banks.