Australian dollar coins and banknotes in Melbourne, Australia on April 4, 2024. AAP Image/Joel Carrett
From bushfire-prone towns to communities with patchy internet, physical cash remains a lifeline for many Australians, banking representatives have told a Senate inquiry into the future of the nation’s cash distribution network.
A Senate Economics Legislation Committee hearing is considering the impact of the impending Cash Distribution Framework Bill 2026, which aims to support and regulate the ongoing distribution of cash around the country.
During the July 21 hearing, the CEO of the Customer Owned Banking Association (COBA) Stephanie Elliott says physical cash was still integral.
“The global lesson is clear, in a digital-first society, cash remains an essential throwback,” she said.
“It supports community resilience, continuity and preparedness when digital systems are disrupted. There is, of course, no doubt that Australians are changing the way they pay, with everyday cash transactions continuing to decline.
“And for a country as geographically diverse as Australia, that shift is fundamentally challenging the economics of keeping cash circulating. But the decline in transactions does not diminish the influence of cash as a cornerstone of the Australian economy.”
COBA, which represents 47 customer-owned banks serving more than 5.4 million Australians, said it remained particularly important in rural communities face unreliable digital infrastructure, power outages, or limited access to physical banking services.
Cash Use Drops to Just 15 Percent of Total Usage
Australian Banking Association (ABA) Executive Officer Simon Birmingham said cash payments had fallen significantly, from about 70 percent of transactions in 2007 to around 15 percent today, with the COVID-19 pandemic having sped up the process.
That decline has placed financial pressure on cash-in-transit provider Armaguard, with major banks and retail partners contributing more than $100 million to help maintain cash distribution while a long-term solution is developed.
“Understandably, this dramatic drop in the volume of cash use placed pressures on the businesses of those who logistically move cash around our economy,” the former senator told the hearing.
“These pressures emerged at a time when the two largest cash and transit businesses in Australia merged, creating a virtual monopoly.”
When asked by Liberal Senator Kerrynne Liddle about whether COBA supports the bill before parliament or not, Elliott said her organisation was “very supportive.”
COBA said it broadly supports the legislation but raised concerns about two areas.
Elliott said her banking group wants clearer limits around the definition of a “cash distribution service” to ensure the new rules did not apply to ordinary banking services such as branches.
COBA also wants smaller financial institutions to have easier access to dispute resolution, arguing that the cost of arbitration could discourage smaller banks from challenging unfair pricing arrangements.
It has suggested allowing groups of banks with similar concerns to take part in collective arbitration rather than each having to pursue separate cases.
The bill is currently under Senate committee examination, with a report due in August 2026.
