The Black Economy Taskforce produced its final report in October 2017. The Chair, Michael Andrew, said in the covering letter in producing the Taskforce report that “there was a strong sense of community outrage at the inequality and unfair disadvantage created by the Black Economy. I hope that by creating an efficient level playing field we can lower taxes, treat all businesses and workers fairly, increase community services or reduce debt if all Australians operate within the rules”.
Last week, the federal government released an Exposure Draft Explanatory Materials in respect of a Bill that proposes to implement the Taskforce’s recommendation. The Bill is the Currency (Restrictions on the Use of Cash) Bill (2019).
The Bill introduces offences for entities that make or accept cash payments of $10,000 or more.
The explanatory material notes that “this ensures that entities cannot make large payments in cash so as to avoid creating records of the payment and facilitating their participation in the Black Economy and undertaking related illicit activities”.
The explanatory materials go on to observe that “to mitigate the risk that large, anonymous cash payments may be used to facilitate money laundering and tourism finances, businesses that provide certain services must report cash payments for goods and services of $10,000 or more. This includes business that provide financial services and provide gambling services.
In the 2018-2019 budget, the government announced that it would introduce a cash payment limit for transactions between businesses and individuals with effect from 1 July 2019. This was recently extended to 1 January 2020.
The Bill creates new offences that apply if an entity makes or accepts cash payments with a value that equals or exceeds the cash payment limit of $10,000.
The new law introduces a number of offences carrying strict liability.
Business must be conscious of these potential changes to legislation in order to ensure compliance with Regulatory Bodies. The imposition of this requirement if passed, will add to the already strict regime of AUSTRAC reporting and money laundering.