Treasury confirms exemptions for bankless towns

Major supermarkets and fuel retailers in unbanked cities could qualify for an exemption from the Government’s proposed cash requirement, raising new concerns about access to cash regionally. Dale Webster reports.

MAJOR-BRAND supermarkets and fuel retailers in unbanked cities may be eligible for exemptions from the Federal Government’s proposed cash requirement regulations under the exceptional circumstances provisions, a Treasury official confirmed at Senate Estimates hearings today.

Information obtained by Western Australian Senator. Tyron Whitten in a series of questions regarding regional banking services.

Senator Whitten asked:

“If there is no bank branch or reliable financial institution to receive cash or deposit receivables in a location where a supermarket or fuel sales point is located, will this be considered an exceptional situation?”

“It could be” First Deputy Secretary of the Financial System Division Lynn Kelly he replied.

Ms Kelly said the draft regulations contained no definition of exceptional circumstances and each application would be assessed on a case-by-case basis by the Australian Competition and Consumer Commission (ACCC).

After acknowledging that poor access to cash services could be grounds for exemption from exceptional circumstances, Ms Kelly added that the Government was looking for a temporary solution:

There is another piece of work that the Council of Financial Regulators is undertaking within its cash regulatory framework, and the big underlying driver of that work is ensuring affordable access to cash across Australia.

The two need to fit together.

Senator Whitten continued:

An example of this happened about two years ago in Queenstown, Tasmania, where a local service station began refusing to accept cash payments and the town recently lost its last bank. The post office cannot keep up with demand for cash, often having to make calls on social media begging for change; The town runs out of cash, making national news.

Can a large supermarket or service station in a district where such problems occur be granted exemption from the legislation in exceptional cases?

Ms. Kelly returned to a solution other than a cash retainer offer:

“Again, this is something the regulator will have to consider, but the cash regulatory framework that the Council of Financial Regulators is working on is looking at how to provide affordable access to cash, and some of the features that are being consulted are service level standards for regional Australia.”

No further information was given about the cash regulatory framework or a timeline for its implementation.

Senator Whitten’s questioning also revealed: Senate Inquiry Regional bank closure decisions, which have been on the table for more than 18 months, are ignored and there is no official response from the government; The government is working directly with major banks to create its own initiatives to replace the eight recommendations made by the Senate committee.

Whitten asked:

“How can the cash mandate be effective for regional communities if banks are not authorized to provide cash services in the regions?”

Ms Kelly said:

We are working very actively with banks on regional banking services and how to support them.

We are also actively working with banks on how they can move towards regional banking services.

Ms Kelly said the Treasury was involved in Westpac’s recent announcement that it would work with councils to bring some banking services back to regional communities; This is a plan drawn up by a spokesperson for the Regional Banking Alliance. David Heine criticized for leaving “The profitable part of banking from the social contract on the provision of real branch services”.

Ms Kelly considered a request for the Senate inquiry to be provided with a summary of the Treasury’s advice to the Government on recommendations to close regional banks.

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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