Personal Finance

Australia to ban cash payments over A$10,000

  • Last Updated:
  • May 16th, 2018 1:28 pm
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Australia to ban cash payments over A$10,000

The Australian federal government has introduced a new law to ban cash payments over A$10,000 starting in 2019, as a means to limit tax evasion and black-market transactions.
http://www.news.com.au/finance/economy/ ... 996d512f52
https://gizmodo.com/australia-bans-cash ... 1825946888

I wonder if the Canadian government plans to consider something like this, or they are just going to continue their policy of retiring high-denomination bills so that it takes a suitcase full of cash?
https://globalnews.ca/news/4052577/old- ... dget-2018/
38 replies
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Nov 25, 2014
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Exp315 wrote: or they are just going to continue their policy of retiring high-denomination bills so that it takes a suitcase full of cash?
https://globalnews.ca/news/4052577/old- ... dget-2018/
It's not a very foolproof policy. They just need someone to exchange with, and do black market transactions in a different currency that still has high value notes. Pretty sure this is already being done anyway.
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Aug 20, 2007
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Not really sure that its going to work as they hoped. I would assume that for transactions that are legitimate and taxes are to be paid, people would not choose to pay cash, why would you considering a cheque or etransfer or credit card would be easier. If the transaction is trying to avoid taxes than as long as the two parties agree, whats to stop someone paying 25000 in cash for example.
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Nov 13, 2010
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So how will 3rd world corrupt politicians move their cash briefcases for deposits in western world if all countries do this, lol
They move cash, not via banking wire
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Jun 1, 2006
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Seem like a stupid law because you can just put transactions below $10,000, like $9999. If it is a bigger amount, split them. eg. If it is a transaction for $27,000, $9000 each transaction.
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Nov 24, 2013
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LonesomeDove wrote: Seem like a stupid law because you can just put transactions below $10,000, like $9999. If it is a bigger amount, split them. eg. If it is a transaction for $27,000, $9000 each transaction.
$9000 gets you the car, but if you want the engine reinstalled, that’ll be $9000, and if you want doors and a hood, that’ll be another $9k :D
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Sep 6, 2016
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some Russian people/officials use large suitcases for carrying money. How they will split them by $10000?
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Mar 24, 2008
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nmclean wrote: It's not a very foolproof policy. They just need someone to exchange with, and do black market transactions in a different currency that still has high value notes. Pretty sure this is already being done anyway.
You just need someone to exchange with, you don't even need a different currency. If you and I agree on a cash transaction, we could easily do it. I am curious as to how they'd enforce it in practice.
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The IMF estimates global illicit fund flows at 2-5% of global GDP. Conservatively, that's over $2 Trillion a year.
Government countermeasures are not even making a dent, with 99.9% of money laundering going undetected, full report here
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arvind84 wrote: The IMF estimates global illicit fund flows at 2-5% of global GDP. Conservatively, that's over $2 Trillion a year.
Government countermeasures are not even making a dent, with 99.9% of money laundering going undetected, full report here
There are countries like Spain where almost everyone has both official money and "black" money (i.e., off the books), and when you do a transaction the seller asks whether you're paying with official or black money. :)
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Exp315 wrote: There are countries like Spain where almost everyone has both official money and "black" money (i.e., off the books), and when you do a transaction the seller asks whether you're paying with official or black money. :)
Same in Asia and the Middle East. Especially when it comes to real estate. I have personally seen property purchases made with suitcases of cash Face With Tears Of Joy.
Though banks are tightening up, where there's a will, there's a way...
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Nov 10, 2015
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There are probably more cash transactions like going on than people are aware of.
I sold a motorcycle recently and the guy gave me over a hundred $100 bills. Why? I have no idea and I didn't ask.
When I went to the bank the next day to deposit it, the person in front of me was making a withdrawal, all in cash and a heck of a lot more than I had in my pocket.
I'm sure bank tellers see a lot of this, but of course they aren't allowed to comment to the customer.
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I agree with the other commenters here; seems like a useless law. It will only have an effect on those that do things legally. Think of someone needing to give their lawyer a $12,000 retainer - unlikely any criminal activity here. Now think of someone giving someone $12,000 cash for doing a major renovation on their house, but everything under the table, no way for the government to find out.
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Jan 2, 2015
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I think it will make it a hassle to be a criminal, although it will not eliminate crime.

Even criminals buy legitimate goods and services, although the money was obtained illegally. I'm thinking of all the bills I have to pay... most of them would be difficult, and a few impossible, to pay with cash.

I can go to pretty much any store and pay in cash, so groceries and the drug store are taken care of. My landlord does not accept cash. If I had a mortgage, the money has to come out of a bank account, and of course I could deposit cash into the bank account, but putting in lots of cash every month will draw questions. I don't know if my dentist and eye doctor accept cash; in the latter case, I only need to go infrequently but the expenses can be quite high (although under $10,000, as not even eye surgery costs that much). I seriously doubt I could buy a plane ticket with cash.

How does the Australian health system work? Public, or private? If it's private it would be a nightmare for a criminal. Having insurance is better than not having it, but will the insurance provider accept cash?

My credit card company does not accept cash. If I wanted to buy something online, it would be harder (though not impossible) to do so; presumably I can buy pre-paid credit cards in cash, or use Paypal and link it to the same bank accounts I'm dumping cold hard cash into. I think this would be really important. Many places will not accept cash, but they're only interested in whether you can pay for it via debit or credit card. They don't need your bank statement.

My phone provider does not accept cash, but I figure a criminal will get a pay-as-you-go plan and could presumably buy phone credit at the store in cash.

A criminal probably wants an alarm system. Can you pay for that in cash? That's an issue if it's an expensive "legitimate" operation that looks the other way as the obvious criminal pays their bill.

Transportation would be a mild problem. No self-respecting gangster takes public transit or rides a bike. They could buy a car or motorcycle in cash, but gangsters don't normally buy reasonably-priced, lightly-used vehicles that cost less than $10,000. They buy flashy cars that provide status and respect, then upgrade them with powerful sound systems, tinted windows, custom engine jobs, etc. The criminal will probably have to go to a not-at-all legal car dealership (this truck fell off the back of a truck) if they want a respectable car.

This is both a bigger and smaller problem for a big criminal. They bring in more than $10,000 per month, or even per day, but they probably know how to launder money. I think it's an even bigger deal for a cash-only business that isn't paying their taxes. That cash-only business needs to pay the rent or mortgage, the power bill, and so forth; in other words, an illegitimate business still has legitimate expenses, and some of these expenses might exceed $10,000 per month (for a big enough business).

I think in general this would be a moderate inconvenience for a criminal, as cash would only be used to deal with criminals, and the criminal needs to get that money into "legitimate" circulation without drawing the bank's attention. Quasi-legitimate and legitimate marijuana dealers (depending on jurisdiction) have this problem, as even where marijuana is legal, the customers are used to paying in cash, and the bank doesn't like that. Even some 100% legitimate businesses run into this (there was a story from the US about a diner that was shut down for a while because customers paid cash and the diner owner was making large cash deposits). I think it would be a bigger problem for a tax-dodging "off the books" business that isn't an outright criminal enterprise.

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