There’s a ‘cash & carry’ crisis that has the RBA, Treasury and ASIC ganging up to kick Lindsay Fox and his Armaguard operation out of business.

To be precise, these groups are urging the Albanese government to mount a takeover of the business, arguing the distribution of cash around banks, major retailers and the whole of the economy generally, shouldn’t be dependent on one business that gets government support to survive.

While history has taught me to avoid supporting government takeovers of businesses, this has been a sector that has relied on public sector and key customers’ financial assistance for some time. And anyway, cash is still pretty important nowadays.

The AFR’s Angira Bharadwaj tells us:

1. In 2010, 62% of all payments were cash.
2. In 2021, cash was used in only 13% of transactions.
3. Accenture says b y 2030, it will be down to 4%!
4. But now, there are still 1.5 million Aussies who still use cash for 80% of their “in-person transactions”.

Despite the lesser role for cash (which sped up by the Covid lockdown and the older generations’ discovery of the wonderful world of online shopping via credit or debit cards), the likes of the big banks, big retailers and Australia Post still need a secure business like Armaguard to ensure cash is collected and delivered from the likes of stores, ATMs, etc. to ensure the economy works effectively.

Anyone who has encountered an “Out of Order” sign on the only ATM in walking distance knows how crucial cash can still be.

But this still important business/service has been in crisis for some time and this week the AFR revealed that “the Commonwealth Bank, Westpac, National Australia Bank, ANZ, Bunnings and Australia Post – agreed to another $25 million funding injection this week to keep Armaguard operating until December 31.”

This followed another $50 million lifeline provided by this group previously after Lindsay Fox’s team told their key customers that Armaguard wasn’t profitable and could shut.

Importantly, while no one is arguing that Armaguard is run by a bunch of unproductive bums, the declining role of cash has meant the customer demands for the cash carrying service is on a big slide.

This sets the scene for a research paper from the Council of Financial Regulators that said the free flow of cash is too important for the economy and implied it shouldn’t be in the hands of a struggling business.

And the researchers sensibly concluded: “Cash continues to have an important role in society, including supporting public trust and confidence in the broader financial system. A regulatory framework should give a regulator the necessary tools to support community confidence in the cash distribution sector and, in turn, the broader financial system”.

The research also underlined how the regions needed a service that is largely unprofitable for a business like Armaguard. “Regional businesses, bank branches and ATM service providers rely on cash distribution services,” the paper said. “However, the commercial incentive for servicing regional routes has been decreasing over time.”

Okay, while the case for taking Lindsay Fox’s business off him is very clear, the big stoush ahead is linked to the Government getting parliamentary support for the takeover. However, the bigger wrangling will be talking turkey with the country’s greatest truckie on what price Albo should pay!

I’m sure the country’s media can’t wait for that showdown to happen!