By Matt Wilson
As YieldReport readers would be aware, current legislation in Australia requires financial intermediaries such as banks, brokers and car dealers to report any transaction in cash over $10,000 that appears to be ‘suspicious’. There are no current restrictions however on any cash transactions.
This may be about to change.
In the Federal Budget of 2018 the then Treasurer, Scott Morrison, announced a further crackdown on the “black-market economy” by proposing a complete ban on any cash transactions over $10,000. The plan was announced as a way to crack down on large cash transactions such as those used by criminals and others seeking to avoid tax. Heavy criminal and civil penalties would apply to those breaking the proposed laws.
Subsequent revisions to the proposal that have been floated in the media have been to reduce the cash transaction limit to $2,000.
Such was the outrage about the proposal the Government received over 4,000 submissions, most against the move. On 19 September 2019, the Labor Party, the Greens, the Centre Alliance and One Nation all voted against the proposal and referred the bill to the Senate’s Economics Legislation Committee. Further submissions to the Committee closed on 15 November 2019.
The Committee met in the weeks leading up to Christmas to review submissions and, due to the Christmas timing, discussions around this may have escaped the attention and scrutiny it deserved. The Committee is due to report back on 28 February 2020. [Ed: On 6 February the Senate amended the reporting date from 7 February 2020 to 28 February 2020].
In one corner is a government that is touting its credentials on targeting the black-market economy of tradesmen, drug dealers and people like cleaners and casual workers who demand cash payments that can easily be hidden from the taxman.
In the other corner are ordinary people and small businesses that claim the government is infringing on their privacy and rights with many seeing more sinister motives behind the move – a Government controlling even more aspects of our daily lives and, in the future, potentially restricting what they can spend their hard earned money on.
The Senate Committee attracted more than 2600 submissions but only 130 of those will be published. Many have argued the Government is a mounting a direct assault on their ability to manage their own money; in effect, restricting the ability of someone to save cash and spend it as they wish. Others such as the Australian Funeral Directors Association argued that many elderly Australians set aside cash for their own funerals and that, in future, doing so might attract heavy criminal charges.