The Senate Economics Legislation Committee has recommended the passage of the Currency (Restrictions on the Use of Cash) Bill 2019 that would see cash purchases over AU$10,000 banned across the country.
The Bill, if passed, would essentially block the purchase of goods over AU$10,000 via cash and also introduce offences for entities that make or accept cash payments of AU$10,000 or more.
Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), businesses that provide certain "high risk" services must report cash payments for goods and services of AU$10,000 or more. Similarly, a person entering or departing Australia must declare amounts of physical currency of AU$10,000 or more.
The idea to extend this to transactions between businesses and individuals came as a recommendation from the Final Report of the Black Economy Taskforce.
The government previously already agreed to introduce the cash payment measure, expecting it to take effect from 1 January 2020, after it had already been pushed back from 1 July 2019.
The Bill was waved through the lower house in October, and if it makes it past the final hurdle, individuals could face up to two years behind bars if they fail to comply.
The committee wants the commencement date to be pushed back again, and for it to not be applied retrospectively.
"Based on the evidence provided, the committee agrees that non-cash payment methods create clearer records; are usually 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 committee wrote in its report [PDF].
Although recommending its passage, the committee said it wasn't clear that the penalty provisions are appropriate.
"The committee is concerned that a disproportionate penalty could be applied to a small or medium-sized business, whose processes and procedures may not be as sophisticated as larger businesses," it wrote.
To that end, one of its recommendations was to review the penalty provisions to ensure they are not overly harsh, particularly in relation to one-off breaches as opposed to repeated offences, which it said are more likely to be money laundering and tax evasion.
Before passing the Bill, the committee wants the government to review existing powers and trends in the digital economy to assess whether the Bill is the most effective response to the black economy.
The committee also recommended for the government to develop a communications strategy to assist in "dispelling some of the unsubstantiated claims regarding the Bill".
"The strategy needs to be in place before the commencement of the Bill to allow sufficient time to inform the public and businesses of their responsibilities," the report says.
Another recommendation was that the exemption for payments relating to personal and private transactions be provided for directly in the Bill before it becomes law.
Further recommendations included looking into the availability of electronic banking services in remote and regional Australia, including during natural disasters, and whether there will be a detrimental economic impact on those areas; and that the government assess the impact of the Bill on particular migrant communities, particularly in relation to funerals, to determine if there are potential negative impacts.
The government entities believe the tech can significantly reduce the costs of compliance and regulation imposed on reporting entities.
They occurred after the watchdog got the green light in December 2017 to extend anti-money laundering and counter-terrorism financing regulation to digital currency exchanges.
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