Morrison government planning to ban cash: What does this mean for you?
In the recent Budget, the Morrison Government announced its drastic proposal to ban business cash transactions exceeding $10,000. This proposed new legislation, known as the known as the Currency (Restrictions on the Use of Cash) Bill 2019, is, as the Government describes, an attempt to ‘tackle tax evasion and other criminal activity’.
The issue with this proposal is that the $10,000 threshold may be altered by regulations and therefore does not need to be voted on in Parliament. This means that, in the event that this proposal is accepted, the government may lower the threshold to any amount in the years to come.
The new proposed law would also end a business or company’s reporting obligations to the anti-laundering organisation AUSTRAC.
Under this new proposal, business owners may face fines of up to $25,000 and two years jail for accepting cash payments for goods and services worth over $10,000 from 1 January 2020.
It has also been noted that the same penalty applies for cash donations and to payment plans where the total is split into a serious of payments.
Not all transactions will be restricted by the proposed legislation. The following are exempt:
- Transaction of consumer to consumer payments (eg, purchasing a second hand vehicle) but not including transactions involving real property (eg, land and real estate).
- Withdrawals and deposits to and from banks.
- Exchanging foreign currency.
All other transactions must be made electronically or by cheque.
This proposal has sparked back lash, with many critics raising concerns over privacy as such restrictions on cash undermines an individual’s privacy by creating a digital footprint of all our transactions.
The proposed start date of the cash payment limit is 1 January 2020 and for certain ASUTRAC reporting entities from 1 January 2021.
For further information in relation to this proposed new legislation and how this may affect your business, please contact one of our experienced staff at Bambrick Legal today.