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Anna Bligh Interview with ABC Radio Brisbane, discussing future of cash and Digital ID

Anna Bligh Interview with ABC Radio Brisbane, discussing future of cash and Digital ID

3 April 2024

Steve Austin 

Well as you know, the Commonwealth Government has made it clear they consider access to cash a priority for the Australian economy and the country’s largest banks, as well as Coles, Woolworths, companies like Wesfarmers and Australia Post have been trying to put together a short term lifeline for Armaguard, who’s the company that distributes cash around Australia and it’s crunch time. There was an offer of $26 million for six months. That was subject to what the banking industry considered reasonable conditions, and according to the Financial Review, banks consider Armaguard has undermined what’s been so far regarded as good faith negotiations. So I’m keen to know who will blink first. Anna Bligh is with the Australian Bankers Association, Anna Bligh. Thanks for joining me again on this issue.

Anna Bligh

Thanks Dave.

Steve Austin 

So I thought that yesterday was the deadline for this whole deal with our Armaguard. Can you just clarify the deadline situation for us, please Anna Bligh.

Anna Bligh 

Steve, the deadline was actually last Thursday, just before Easter. And that deadline was really set by the company who advised us earlier this year that they were at risk of running out of funds by mid March. But thankfully, the parent company Linfox has decided to throw a lifeline to the company with a $10 million injection of funds to keep them operational.

Steve Austin 

So I don’t think there was any shortage of cash over the Easter break that I heard of Anna Bligh?

Anna Bligh 

No, as I said, very welcome news that the parent company has decided to provide the short term assistance to Armaguard. The trucks are all still out there filling ATMs, providing it to supermarkets, pubs, and clubs Steve. So that’s a very welcome development. But in the long term, you know, this is a is a very difficult problem. There’s no simple solution. We’re a very big country, relatively small population, and we are using less and less and less cash. So we’ve all got to put our thinking caps on and find a different model that will help us get cash where it needs to be, even when it’s only accounting for maybe 5% of transactions, which could happen, you know, within the next three to five years,

Steve Austin

According to the Financial Review, one of the options being considered as the use of smaller delivery firms or even Australia Post, maybe somehow delivering it, can you clarify is that one of the things that’s on the table?

Anna Bligh

Steve, Armaguard accounts for more than 90% of the market. So there are some smaller cash in transit providers, but they’re very small operations and really concentrated, as you would probably expect, in a couple of capital cities where there’s still profit to be made. The big challenge for the country is, how do we use all of our resources in the best possible way, Australia Post does a terrific job nationally, of providing cash through their post offices. And they do that in some of the most remote places on not just remote places in Australia, but on the planet. So, you know, nobody thinks that Australia Post can just walk in and become a big cash and transit player. But it’s very important that they’re at the table as we design something that will work in this situation effectively. It’s like we’ve had over the last 40 or 50 years a six lane freeway delivering cash. We probably now just need a footpath. How do we get from where we are, to where we need to be and ensure that Australians, wherever they live, can still get cash on a reasonable basis.

Steve Austin 

It’s been reported that Armaguard now plans to renegotiate cash delivery contracts with individual banks and retailers. Is that true?

Anna Bligh 

Well, Armaguard, have advised us that that’s their intention. That’s entirely a matter for them. Of course, every one of those companies have contracts with Armaguard that expire at different times, in 12 months, in two years, in three years. So whether or not they’re willing to enter into negotiations about a price rise will be a commercial decision for them. You know, Armaguard advised ourselves, the government, the Reserve Bank, late last year that they were at risk of running out of cash. In very good faith, those parties came to the table and said, there’s two things here. There’s a short term funding injection to effectively buy time to design a better system for a very rapidly changing cash environment. They offered $26 million without the need for any interest repayments, or without any equity in the company without getting dividends. So I think it was a very reasonable offer. There was disagreement about some of the conditions. In the end, I think it’s very welcome news that the parent company has decided that they would rather provide some short term funding. But the long term issue hasn’t gone away, and we’re all going to have to get round the table. These sort of these discussions often go up and down, but I think most of the players around the table are very focused on the national interest.

Steve Austin 

Anna Bligh is the Chief Executive of the Australian Banking Association. This is ABC Radio, Brisbane, we’re talking about something that’s quite basic and fundamental the delivery of cash to shops, supermarkets, ATMs, banks, post offices around Australia. Armaguard apparently couldn’t deliver cash around Australia for $26 million, even though they have a monopoly. Apparently, they refuse to open their books for due diligence to the ABA or other parties. Does the ABA regard Armaguard as undermining good faith negotiations as was written about in the Financial press? Can you clarify that for me, Anna Bligh?

Anna Bligh 

Well, as I said, Steve, the parties all came around the table in good faith, very focused on what customers need and on the national interest.

Steve Austin

But Armaguard wouldn’t open their books for you in what would normally be a due diligence process, they wouldn’t open their books?

Anna Bligh

Their preference was to take funds from the parent company, rather than open up all of their books. The only reason the parties wanted them to share some of their financial data is because we’re trying to help get the business to a viable position and help design a long term future. So I would hope that in the not too distant future, we can be talking again about what the long term future of this industry looks like. What we’re seeing as the real underlying issue here is the rapid change in how Australians are paying for goods and services. 13% of transactions are now done with cash, that’s down from 70% in the mid 2000s, it could be as low as 5% by 2030. Digital wallet payments Steve, in 2018 they were worth less than a billion dollars, and they are now worth $93 billion in just four years. So that’s a boom, it’s a massive shift and we know there are still going to be people who need cash. There are people who are unable to use digital banking systems. There are, particularly in Queensland communities, that are all too regularly affected by natural disasters where electricity is out for prolonged periods and cash is a really vital lifeline. We also know, I think even those of us who use tap and go all the time, we know that sometimes systems go down and we like to have a bit of cash on hand as comfort in those circumstances. So they’re all important to the economy and we can’t just leap into the digital world and pretend that that doesn’t exist, because it’s real.

Steve Austin 

All right. I know you’re under real time pressures. This one final question that’s tangentially related but not about cash delivery, digital IDs that the Senate passed the federal government’s digital identification bill. It now goes back to the House of Representatives for final debate. The banks of Australia were really keen to see citizens have a digital identification number, explained to me why Anna Bligh?

Anna Bligh 

Yes, Steve that’s right, banks are very much behind and supportive of this initiative. I do stress that it’s voluntary, and customers and citizens will make up their own mind if they want to use it. But what it will mean is when you open a bank account or you go to get a loan, or you go to hire a car, you won’t be required to hand over documents that identify you. So you won’t have to go with your passport, your birth certificate, your driver’s license, which means you are better protected from people stealing your identity, you are better protected from people hacking into those organizations like the car hire place, and getting your personal details and then using it to scam you or to hack into other organizations. We’ve seen some very big data breaches across the country over the last five years. Banks also know that scammers are often using stolen ID’s is to set up accounts that they send their scammed money into. So you know, as I said, it’s it’s voluntary, but it means for customers and for citizens a much, much more secure way of providing identification when that is required. Instead of your documents, things stored in all different ways by many, many different organizations and that makes all of us very vulnerable.

Steve Austin 

Anna Bligh, thanks for your time.

Anna Bligh 

Thank you Steve

Steve Austin 

Anna Bligh is the chief executive of the Australian Banking Association.

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