Government gives green light to $ 10,000 limit bill

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The Senate Economic Legislation Committee recommended that the 2019 Currency (Restrictions on the Use of Cash) Bill be passed, subject to several recommendations, including a review of existing powers and penalty provisions for ensure that the bill is the “most effective response” to the black economy.

The bill, which proposes to make cash payments in excess of $ 10,000 a criminal offense with a two-year jail term and a fine, was originally scheduled to start from January 1, 2020, but Deputy Treasurer Michael Sukkar has now confirmed that it will not be retrospective in nature and that a new start date will be set in due course.

The measure was introduced to crack down on underground economy behavior and money laundering by ensuring that entities cannot avoid scrutiny by making large cash payments.

The Senate committee received 2,659 submissions as part of its investigation, with many objecting on the grounds that the legislative amount of $ 10,000 could be reduced by future governments and that Australia could soon end up in an environment of negative interest rates.

However, he dismissed them as “what-if scenarios” and dismissed only “the conspiracy inherent in some of the contributions on the bill”.

While accepting concerns about the effect of inflation around a set limit of $ 10,000, the committee did not believe that an inflation-indexed cash payment limit would be practical to implement.

The inquiry acknowledged CPA Australia’s concerns over the need for the bill, with the accounting body noting that the existing powers were sufficient to tackle the underground economy.

However, he also accepted the view of the Chartered Accountants of Australia and New Zealand (CA ANZ) who argued that a limit of $ 10,000 in cash would help level the playing field in certain industries, such as building and construction, where cash transactions are common and encouraged.

“Based on the evidence provided, the committee agrees that non-cash payment methods create clearer records; are generally more convenient for consumers and businesses; and increasingly involve lower costs, as they simplify record keeping and avoid the security, insurance and other costs associated with handling and holding cash, ”the Senate committee said.

“The committee also recognizes the importance of cash as legal tender both for transactions and as a store of value. It is important that the government strike the right balance in this regard.

“The committee reiterates that, contrary to what a number of survey participants claim, cash will still be legal tender in Australia if the cash payment limit goes into effect, and individuals and businesses will continue to be able to withdraw money, regardless of denomination, from their bank accounts and hold them outside the financial system.

He recommended that the government implement a “comprehensive communications strategy to inform the public and businesses of their responsibilities,” noting that there remains confusion as to how the cash payment limit would work at a practical level. .

“Cure worse than evil”

In a dissenting report by Green Senator Peter Whish-Wilson, he called for the bill to be dropped, arguing that it violated individual freedoms.

“This bill is a classic case where the cure is worse than the disease,” said Senator Whish-Wilson.

“By criminalizing the use of legal tender and adopting a rosy vision of a world without cash, this government is celebrating the fundamental freedoms offered by hard currency and is moving instead towards surveillance capitalism and interest rates. negative interest. . “

Instead, he called on the government to show its commitment to tackling tax evasion by targeting the “big end of town” by revealing details of settlements between the ATO and companies disputing their tax bill and ending high incomes reducing their incomes. income splitting tax debts through discretionary trusts.

Senator Whish-Wilson also called on the government to fight money laundering by removing the exemption for real estate agents, accountants and lawyers from having to report under the Anti-Money Laundering and the Financing of Terrorism Act 2006.

“AUSTRAC estimates $ 1 billion worth of suspicious transactions passed through the Australian real estate market from just one country, China, in just one year, 2016. mentioned.

Government gives green light to $ 10,000 limit bill

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Last updated: 03 March 2020

Posted: 02 March 2020

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Jotham lian

Jotham lian

Jotham Lian is the Editor-in-Chief of Accountants Daily, the leading source of news, analysis and information for Australian accountants.

Prior to joining the team in 2017, Jotham wrote for a range of national titles including the Sydney Morning Herald and Channel NewsAsia.

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