Government consults on an economy wide cash payment limit

Treasury has published a consultation paper on the Government’s proposed economy-wide cash payment limit of $10,000 for payments to businesses for goods and services to apply from 1 July 2019.

UPDATE July 2019: the Government has announced that it intends to introduce and pass the Currency (Restrictions on the Use of Cash) Bill before the end of 2019.

The proposal was included in the 2018-19 Budget as part of the Government response to the Black Economy Taskforce’s Final Report.

Transactions in excess of $10,000 would need to be made using the electronic payment system or by cheque.

While the Government recognises that cash remains a legitimate means of payment for consumers and businesses, the Black Economy Taskforce Final Report found that significant risks to legitimate commercial behaviour can result from large, undocumented cash payments being made for cars, yachts and other luxury goods, agricultural crops, houses, building renovations and commodities.

Transactions may also be arranged for payment by cash so as to avoid obligations under the tax and regulatory systems or for laundering the proceeds of crime.

Australia does not currently have a cash payment limit, though entities have discretion to refuse to accept cash payments made using coins in excess of a certain amount.

Currently businesses that provide designated services (including financial services, services relating to bullion or gambling services) are regulated under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. These entities are required to submit Threshold Transaction Reports (TTRs) to the Australian Transaction Reports and Analysis Centre (AUSTRAC) within ten business days when a transaction is undertaken of AUD $10,000 or more (or foreign currency equivalent) in cash.

The cash limit will allow businesses and individuals to continue their use of cash for most transactions. Where a good is priced above the cash limit, it must be paid for electronically or by cheque. It will not be possible to split the price into small cash amounts below the cash payment limit.

The cash transaction limit will be imposed for payments for goods and services to all entities holding an Australian Business Number (ABN).

There will be no restriction on the ability of individuals, businesses or other entities to deposit large amounts of cash with their bank or to deposit cash in paying off loans with a financial institution. Payments of $10,000 or more, however, would still be subject to the AML/CTF reporting requirements.

Treasury’s consultation includes whether businesses should have a positive obligation to report cash transactions of $10,000 and above or where a consumer has offered to make a payment in excess of the limit.

Stakeholder views are also sought on what the expected impacts would be if tourists are included in the cash payment limit, whether there are specific impediments to tourists making large cash payments in excess of the limit through the electronic banking system and whether a higher limit should be given for tourists.

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