Australia Opens Attack on Cash

Australia is launching an attack on black money and therefore wants to ban the use of cash for transactions above 10,000 Australian dollars from 1 July 2019 forbid. According to the government, this measure is necessary to tackle the black economy and combat tax evasion and fraud. The government is also considering requiring all companies in the country to pay salaries exclusively digitally.

"Cash is an easy, anonymous and barely traceable mechanism for a black market. Cash payments also make it easier to declare lower incomes and avoid tax liability. As a result, companies that transact in cash gain a competitive advantage over those that don't.", Australian Finance Minister Scott Morrison declared. He is allocating more than $300 million on behalf of the government over the next four years to tackle large cash transactions.

Black Economy Standing Taskforce

The Black Economy Standing Task Force, which was set up in 2016, will oversee the enforcement of the rules, while a new hotline will also be opened where people can report unusual financial transactions involving cash. From these measures, we can deduce that the government is serious about squeezing cash out of the economy, at least for the larger transactions between consumers and businesses and between businesses.

The new task force is said to have already found several examples of large purchases being handled with cash. This includes, for example, the purchase of houses, cars and pleasure yachts, but also agricultural products and raw materials that are traded in cash. According to the government, these types of transactions are harmful to the economy, because honest companies that do pay taxes are disadvantaged.

Less and less cash

In Australia, more and more consumers are switching to electronic payment systems. Whereas in 2007 69% of all transactions were paid in cash, in 2016 this was only 37%. Despite this, there are still a lot of banknotes in circulation, especially those with the highest face value. So it's conceivable that more notes are used in the black economy, but it's also conceivable that Australians keep more cash as an alternative to savings in a bank account.

Australia is not the only country that wants to restrict the use of cash. Countries such as France, Portugal, Greece, Spain, Italy and Belgium have already introduced cash usage limits ranging from $1,600 to $4,800 per transaction.

Financial repression

Globally, the use and possession of cash is increasingly restricted. Governments want to bring in more tax revenue and are therefore taking more and more measures to map money flows and assets. With an increasing tax burden and declining trust in governments and banks, there is an increasing temptation to use cash and keep it outside the financial system.

Also Read: Will Australia abolish the $100 bill?

Australia wants to ban the use of cash for large transactions