Cash Distribution Framework Bill 2026, Cash Distribution Framework (Consequential Amendments and Transitional Provisions) Bill 2026

Senator CANAVAN (Queensland—Leader of the Nationals) (19:17): I'll indicate at the beginning that the Liberal and National parties won't be opposing the Cash Distribution Framework Bill 2026. It's a bill that does establish a reasonable but belated framework to deal with a change in the competitive cash distribution landscape. Our cash distribution scheme is incredibly important to people who have commerce going throughout Australia, but it's especially important in regional, remote and rural parts of our country, where it can often be very difficult these days to acquire cash in order to get the cash floats required for fairs, school fetes and the like.

There is an increasing shortage of cash, which I'll get to in this contribution. The reason for that shortage is that the market has been shrinking in recent years as electronic forms of payment have increased in popularity. The impact of that is that those countries who distribute the cash through the country were, and still are, under economic strain and pressure.

Because of that smaller market, almost three years ago, two of the main players in this space, the main private companies that distribute cash through the country, merged. Armaguard and Prosegur merged to create one entity, and they now cover something shy of 90-odd per cent of the cash distribution market. As I said, there were economic reasons for that merger: the decrease in the size of the market and the need to create efficiencies to maintain a viable distribution system.

In normal circumstances, seeing two entities merge to create a 90 per cent market concentration would raise the hackles of the ACCC, and it may not have been approved. In this case, given the economic difficulties in the market, that merger was approved. However, it was approved with an important condition: that a temporary undertaking be put in place for three years while more permanent regulatory arrangements were being adopted to tackle the situation of such a large entity covering an extremely important part of our economy.

That's why we're here; that's the back story to this. I'd just make the note that this merger occurred. Let me get this right.

It was first proposed in June 2023. It was ticked off, or finalised, in September 2023. And, as I said earlier, the temporary undertaking was a three-year process, a three-year framework put in place by the ACCC.

So it is a bit late in the day—in August 2026, just a month before the conclusion of this undertaking—that we're finally, in this place, settling the arrangements. Keep in mind that this bill was only presented to parliament, into the House first, a few weeks ago. It's not really clear why this wasn't brought forward a lot earlier, given it's been something we've known about for some time now; it's a bit late in the day.

Just weeks after that merger was confirmed, the stark situation in the marketplace was highlighted with Armaguard approaching the government saying that it needed extra funding—otherwise it would go belly up by Easter of the next year, which was Easter in 2024. Some might recall there was a grave risk that cash would dry up across our country, and Coles paused delivery of cash and put restrictions on cash withdrawals in its shops.

That made people face the real prospect of struggling to get cash over a holiday period. And it was that incident which finally caused the Reserve Bank and the government to act and provide a $50 million rescue for Armaguard. Now we have this overall framework, which does a few things to, hopefully, avoid us getting into that sort of sticky situation unexpectedly again.

This bill puts a regulator in charge of the cash distribution system. As I mentioned earlier, a marketplace with 85 to 90 per cent market share certainly puts you into a category where some form of regulation would be wise. There is, in effect, a natural monopoly in this marketplace now.

Given the smaller scale of the market and the cost of distributing cash, it really does seem efficient for only one entity, or largely one entity, to conduct that business. That being said, if that one entity were given unfettered power to set their prices and terms, given how important cash is to many businesses, businesses would have very little choice but to accept such terms and conditions.

That subsequent market power would be in such imbalance that it could lead to quite inequitable outcomes for those businesses that need cash. So we fully support the establishment of a regulatory regime here to tackle that issue and treat the market like the natural monopoly it now is. Such regulation is not unusual in infrastructure markets where there's a clear monopoly, like ports, airports and railways and the like.

The bill also creates an emergency regime such that, if a cash distributor is at risk of collapsing in the future, there's a process that can be engaged, and that process is similar to what we have in place for banks and insurance companies through the RBA, through APRA and through the general financial market regime. This makes sense because there are concerns this could happen again.

I know Armaguard have written to me and others about their concerns about this, but there are these arrangements in place to ensure, in a considered way, that we continue to have viable cash distribution services in Australia. This bill also gives the ACCC the power to require some transparency in pricing and to set service level standards as well, to ensure that they are not compromised as a way of getting around regulation.

Normally we would support free enterprise and hope for no regulation. But, as I said, sometimes there is a need for it in circumstances like this. While this is a positive step—and a belated step, as I've mentioned—that we're happy to support, I would take this opportunity just to point out that this does not solve all of the issues for the use and distribution of cash in our economy.

We've got the trucks; hopefully, we'll continue to have the trucks there, and the armoured guards. But they need a place to deliver it, and too many places in regional Australia are now without banks. In a different role, as chair of the Regional and Rural Affairs and Transport References Committee, I chaired a Senate inquiry on the closure of banks in the last few years.

There have been over 800 closures of bank branches since 2022. Our inquiry, which was tripartisan, played a pretty big role, if I can say so, in putting a stop to that. At that time, we saved a dozen branches that were on sale in your great state, Acting Deputy President Ciccone, from closing, as well as many in North Queensland and other places.

Also, this process has led to a moratorium on closures of bank branches. That moratorium is due to end, though, next year, so we need to think about what is put in place next. This bill doesn't deal with those issues.

The Senate committee then asked the government to negotiate with the banks or look at finding a funding stream, using the bank levy or other mechanisms, to encourage more banks to be opened and stay open. It looked like the government was very close at one stage to doing that and taking on that recommendation. They eventually settled for the extension of the moratorium, but, given that's coming up in the next year, it's time to revisit this.

I would like to see us encourage more banking especially to incentivise those banks and financial institutions that are seeking to work to expand services, and to reward them. It's only fair that all Australians have access to adequate financial services, and as many as possible should have access to good financial services. The other thing this bill doesn't do is ensure that people can continue to be able to use cash if they can get hold of it, if they have a bank, a branch, and an ATM in their location where they live.

There needs to be the ability to use it in store, and we are seeing, increasingly, the threat that some businesses will not take cash. We believe that there should be a degree of mandate here. It needs to be reasonable.

Some small businesses shouldn't have this sort of burden placed on them, but larger businesses should be able to continue to take cash and give people the freedom to use that type of payment. I note the government has put in place a cash mandate, but we believe that it doesn't go far enough; it only covers supermarkets and fuel, and only up to $500, and is only between the hours of 7 am and 9 pm.

It doesn't cover pharmacies, which seems pretty essential and important. We think it should be expanded. With that, I will not hold up the Senate any longer.

As I said, this should have come before us sooner, so let's get it done. Let's hope we can put in place a framework that maintains a viable cash distribution system for our country. The ACTING DEPUTY PRESIDENT ( Senator Ciccone ): Senator Canavan, a little birdie tells me you've got a second reading amendment that you might want to move.

Senator CANAVAN: I move: At the end of the motion, add ", but the Senate: (a) affirms that cash is critical national infrastructure, and that access to cash remains essential for millions of Australians, particularly older Australians and those in regional and remote communities; (b) notes that when a natural disaster strikes, the power goes out, or communications networks fail, it is cash that keeps working; (c) expresses concern that the Government has failed to act sooner, noting that: (i) the risks to the cash distribution system have been evident since the Australian Competition and Consumer Commission (ACCC) approved the Linfox Armaguard Pty Ltd and Prosegur Australia Holdings Limited merger in June 2023, (ii) by Easter 2024 the system was brought to the brink of crisis, requiring an emergency meeting chaired by the Governor of the Reserve Bank of Australia to secure a rescue package, and (iii) the Government has acted only in the final weeks before the ACCC's enforceable undertaking expires in September 2026, and that delay has placed the ongoing strength of Australia's cash system at risk; and (d) expresses further concern about the Government's ongoing failure to address bank branch closures, and its lack of any plan for when the moratorium on regional branch closures ends on 31 July 2027".

The ACTING DEPUTY PRESIDENT: Senator Dowling, welcome back.