The Reserve Bank has reiterated that the $10,000 cash limit bill is to combat money laundering and not to get rid of cash. The proposed cash ban bill which has passed the Lower House last year will not be passed into law until after the Senate assents it. Meanwhile, the bill has received public lashes as it was perceived by the public that the imposition of severe penalties that could easily indict ordinary workers is a major headache.
Although the Reserve Bank’s head of payment policy, Tony Richards expressed optimism that the proposed law will in no way impose negative interest rates on banks’ customers but the Stakeholders also hinted that the law may possibly leave people’s bank deposits vulnerable to negative interest rates, and some members of the parliament including independent MP, Andrew Wilkie had already pitched his tent with the public by saying he would definitely stand against the bill.
Dr Richards alleged that of about $80 billion worth of cash in circulation on a daily basis, only 25 percents of the cash was always used in the transaction while the rest are being held by Australians. He also noted that the proposed law was a recommendation of Black Money Taskforce and not a ploy to deny Australians from spending their money the way they like. The laws are meant to apply to all transaction made to businesses with an ABN for goods or services, affecting major purchases like cars and building renovations because criminal gangs now use large cash purchases of cars and houses and jewellery to launder their gains from illegal activities. Moreover, AUSTRAC has expressed its full support for the bill as it will really tackle black money movement, this was revealed by AUSTRAC’s general counsel-Kathryn Haigh. She added that the financial institution where any customer deposits physical currency of $10,000 or more will have to report to AUSTRAC. The Uniting Church’s Mark Zirnsak also corroborated the AUSTRAC stand saying a number of countries overseas are already successfully implementing the cash limits. In his own words, Andrew Ham of the Law Council of Australia told the Senate hearing that the proposed law could lead to “unintended consequences” because innocent and naive retailers may be victims of circumstances. The Senate inquiry into the proposed law is billed to hand down its findings by February 7, but there is still room for further public hearings before then.