Fatal flaws in Labor’s ‘cash plan’ could bury bankless towns

There are fatal flaws in the Federal Government draft regulation It mandates the acceptance of cash and can be traced to Prime Minister Anthony Albanese’s refusal to respond to Senate recommendations to resolve Australia’s banking crisis.

First two suggestions Senate Inquiry Regional bank closure orders were never introduced in isolation to preserve access to cash and initiate steps to restore state banking services, but a Treasury official admitted in the Estimates earlier this month that the committee report had been used as the basis for “initiatives” the Government has announced since the Inquiry concluded in May 2024.

Cash power of attorney should be considered one of them.

Risky regulation

While a good idea in principle, the problem is that the regulations are written in such a way that unless banking services are restored, businesses in unbanked cities are likely to benefit from exception exemptions due to difficulties in the costs of generating cash flow, investing business revenues and maintaining cash service.

The exemption would give supermarkets and fuel outlets explicit permission to refuse cash from the Government, rather than the current situation where refusal is more complex and the responsibility lies with the business owner.

The government has been warned by MGA Independent Businesses Australia that this will be a problem (MGAIBA) – formerly Master Grocers Australia Ltd – in its first round of consultation earlier this year.

At the group’s presentation, MGAIBA CEO David Inall (who recently announced his departure as CEO) said:

There are challenges with cash management (deposits, withdrawals, general security) in rural and regional areas compared to urban-based businesses.

This challenge is exacerbated when there is no bank in the city, or where remaining banking services are offered with reduced services, or when the bank is not the bank where you usually conduct your business banking. Moreover, under these conditions, there are also challenges in terms of cash flow management, which is necessary to facilitate uninterrupted business operations.

Security services that carry cash are expensive and in many cases are no longer operating. ATMs can be expensive to use. They can be unreliable and difficult to service in regional locations. Where banking services are not available in the city, cash must be transported to larger regional centers through unsafe means.

Reported comments Made by NAB chairman Andrew Irvine At an event held during the first round of consultation, cash was a factor in banks bailing out regional towns:

The cost of cash is real. Think about it, there are two men driving around in an armored vehicle with guns… carrying cash in a country thousands of kilometers in size.

There are 20 or 30 warehouses in this country, moving them, sorting them, and doing all this with cash and physical cash, including coins, and the coins in the barrels are heavy. None of these are visible to humans, but they all cost money. So of course the question is: Who will pay for this?

More importantly Mr Irvine, who is paying for this in NAB, ANZ, Commonwealth, Westpac and now all the towns left unbanked by Bendigo?

The draft proposals acknowledge this point and say exceptions will be taken into account if accepting cash payments means increasing the price of goods to cover the cost of cash delivery.

Information access

Reporting accurately on the results of this mandate was not easy, as there were only 14 days to research, write, and give readers time to evaluate the information.

The Treasury was asked whether difficulty accessing banking services would be considered an “exceptional situation” (along with the situation in Queenstown, Tasmania). Bendigo Bank recently closed The town’s last bank is given as an example), but no response has been given to date.

Journalists were also hampered by limited access to the first round of applications; Of the more than 4,000 submissions received, only 52 were published, and none of them came from people with lived experience or expertise on the subject.

What can be reported is this:

• The cash requirement will now only apply to supermarkets and fuel outlets after the government removed its confusing list of “essential services”;
• small businesses will still be exempt based on income;
• income of individual franchisees will be assessed at the group level;
• cash payments will be limited to $500; And
• Any affected business may be granted exemption in exceptional circumstances.

At the moment it has been impossible to get a full picture of how this will be affected across Australia, but what is known is that the small business exemption will mean Aboriginal communities in Far North Queensland are one of the places where the Government will not ensure that the right to pay for food and groceries with cash is protected.

Senate releases report on regional bank closures specifically mentioned The importance of cash in indigenous communities.

Decision on the draft

Under these circumstances (with small business and exceptional circumstances exemptions and nothing being done to return banks to regional communities), the cash mandate has the potential to accelerate cash depletion rather than supporting the continued use of cash.

As reported eight months ago RegionalThere’s a big difference between giving the government the go-ahead to refuse money and the less-accepted option of putting up a sign and asking frontline staff to explain how purchase contracts work to annoy customers 20 times a day, risking abuse.

In an alternative reality – where the Government respects the work submitted to the Senate Inquiry and accepts all the recommendations that members of its own party have helped to formulate – the proposal would help deliver the desired outcomes.

In the current situation, this has the potential to work against everyone except those who would benefit from the loss of cash.

The draft regulations in question can be examined HERE. Treasury invites public presentations despite Deputy Treasury Secretary Daniel Mulino He said only industry feedback will be taken into account.

Questions are being asked by many whose submissions have not seen the light of day about whether only industry feedback has been taken into account since the beginning of this process.

The deadline for applications is Friday, October 31.

Comment on the Senate Inquiry

The Government’s response to the final report of the Senate Standing Committee on Rural and Regional Affairs and Transport Query The regulation regarding the closure of regional banks has a delay of 430 days as of October 26, 2025.

The only way the cash mandate will be allowed to go through the process of becoming law is for the Albanian Government to accept the eight recommendations from the Inquiry, which began with the appointment of a panel of experts to investigate the feasibility of establishing a publicly owned bank.

Dale Webster at the opening ceremony buyer Walkley Foundation Free Journalism Grant in Regional Australia. This article was originally It was published Open Regional and republished with permission. You can follow Dale on Twitter @TheRegional_au.

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