The cash ban has been stalled after submissions. Photo: OSD

Government legislation that would have outlawed cash payments for goods and services exceeding $10,000 has been set aside and referred to a committee until February 2020.

Following a influx of public submissions, the setback of the bill has been described as a “notable victory”, while concerns still remain surrounding the details of the proposed legislative changes.

BAN BREAKTHROUGH

Thousands of submissions and phone calls from fired-up Australians has led to the delay of proposed legislative changes to ban cash transactions over $10,000.

Labor joined with One Nation, the Greens and Centre Alliance to overrule the government and refer the bill to a Senate committee for an extended inquiry that is due by 7 February 2020.

The breakthrough came after Assistant Treasurer Michael Sukkar introduced the Currency (Restrictions on the Use of Cash) Bill 2019 in the House of Representatives recently.

This was first time anyone was able to see the bill since the Treasury issued its exposure draft at the end of July, looking to minimise scrutiny of the plans.

That didn’t work, with Treasury inundated with over 4,000 submissions, compared with the average of 30 submissions it receives for a typical consultation.

Evidencing Treasury and the government’s continuing intention to ram the bill through, Sukkar introduced it without any response from Treasury to the submissions, which Treasury is refusing to disclose or make public on its website.

This new setback will mean the government cannot stick to the original schedule of banning cash transactions from 1 January 2020, as was the initial plan.

France, Portugal, Spain and Bulgaria have already outlawed certain cash transactions to and between businesses, supposedly in the name of cracking down on the black economy.

THE PLANS

Earlier this year, the new public consultation revealed cash transactions may be coming to an end.

According to the draft legislation released in July, cash payments made to businesses for goods and services will be banned under a radical change to currency laws.

Under the proposal, it will become a criminal offence to make or accept a payment from businesses in excess of $10,000 cash, or for a cash donation equal to or in excess of $10,000.

The maximum penalty is up to two years imprisonment and/or $25,200 in fines. Transactions equal or in excess of this amount would need to be made using the electronic payment or by cheque.

From an initial analysis of the finalised bill, one thing is clear: it is even worse than the exposure draft. The bill legislates an absolute ban on all cash transactions over $10,000, full stop.

This has the ability to grow to include bank deposits and withdrawals, individual-to-individual transactions — with any breach of the ban carrying strict liability, even if accidental.

In conjunction, new reports released by payment industry bodies have revealed Australia’s shift to a digital economy is accelerating, with increasing cashless payments outperforming continuing declines of cash and cheque at an unprecedented rate.

Furthermore, this transition can also be found in the federal banking industry, with Reserve Bank of Australia (RBA) governor Philip Lowe announcing cash is becoming a “niche payment”.

THE CONCERNS

Such moves won’t affect the criminal syndicates that governments claim they want to target with cash economy restrictions, rather it forces citizens to subject personal financial dealings to the scrutiny and oversight of government bureaucrats.

This changes mean citizens will need approval from a bank before starting any transaction valued at over $10,000, with only a few exceptions.

Once it takes effect, there will be little to stop the threshold from slipping down drastically to $5,000 or $3,000, with lower thresholds already in effect elsewhere in the world.

The European Commission came to the same conclusion in a report last year, which found that “restrictions on payments in cash would not significantly prevent terrorism financing”.

The burden of such restrictions then instead falls upon law-abiding businesses and individuals who are already required to disclose large cash transactions to the Australian Transactions Reports and Analysis Centre or AUSTRAC.

Businesses will be forced to comply with an additional layer of bureaucracy by having to move payments to the digital system through a bank.

This means that Australians will be forced to pay for financial services that they otherwise wouldn’t use, while also giving the banks transaction data ripe for harvesting.

Stopping policies like the cash ban will block the government from resorting to extreme policies to continue to prop up the failing financial system, and force real financial reform on to the agenda.