Ban on cash payments above $10,000 under proposed law
People could be jailed for two years and fined $25,200 just for using more than $10,000 in cash in one transaction under a new bill being put to the Australian Parliament.
Australia has introduced a draft bill to Parliament that will limit cash payments to AUD 10,000 per transactions, on threat of jail and financial penalties.
The Australian government issued a consultation paper on the cash payment limit last May, on the back of a budget announcement on the new measure, said to have been one of many initiatives aimed at tackling “illegal black economy behaviour”.
According to local reports, Treasurer Josh Frydenberg quietly introduced the bill to Parliament last month, following recommendations from the government’s Black Economy Taskforce claiming that the measure would help reduce money laundering and tax evasion.
The Taskforce estimated last year that illegal activity could be worth as much as 3 percent of GDP and costs the Australian economy up to AUD 50 billion a year. The cash payment limit is expected to raise more than AUD 5.3 billion (USD 3.6 billion) in extra tax revenue.
“This ensures that entities cannot make large payments in cash so as to avoid creating records of the payment and facilitating their participation in the black economy and undertaking related illicit activities,” the Currency (Restrictions on the Use of Cash) Bill 2019 reads.
If passed, the law would come into effect on 1 January 2020 and would criminalise all cash payments over AUD 10,000 made to businesses with an ABN, forcing transactions equal to or over the limit to be made electronically or by cheque.
The penalties, jail time (up to two years) and fines (up to AUD 25,200) would apply to both the individual and the business part of the transaction, but there are exemptions for individual-to-individual transactions, such as for the private sale of a second-hand car.
The cash payment limit also does not apply to deposits and withdrawals from banks.
Many industry groups, including CPA Australia and the ACCI (Australian Chamber of Commerce and Industry), are calling for the bill to be withdrawn.
“The focus on criminalising certain cash transactions is an extreme response to the problem of avoiding scrutiny,” said CPA Australia, adding that the bill “significantly increases the power of government agencies to investigate and prosecute people for an action, without needing to demonstrate the commission of what would normally be considered a criminal act, nor the intent to commit such an act”.
“Cash is legal tender and its value must be protected, not undermined,” the ACCI said in a 2018 submission to Treasury.