Restricting cash payments is an important initiative as it makes it more difficult for participants in the black economy to benefit from their activities. Black economy participants generally prefer the use of cash due to its anonymity. Cash allows them to both conduct their operations and to convert their proceeds into other assets, for example luxury cars, boats and homes. Restricting the amount of cash that can be used for payment will not eliminate the black economy, no one measure will ever do that, but it does make the life of enforcement agencies just that little bit easier.
The draft legislation is supported by CAANZ. The proposed legislation could be improved by applying the $10,000 cash payment limit to all payments not just payments made to or by businesses. Taking such an approach would make the law easier to enforce, make it harder for black economy participants to operate and reduce red tape. The amount of the cash limit could also be lowered.
Crypto currency is an obvious substitute for cash and can also offer the same anonymity. Numerous government websites already offer warnings that crypto currency is increasingly being used by black economy participants. Excluding cryptocurrency from these reforms will only supercharge its use by the black economy. Ideally, crypto currency should be subject to these provisions as well.
Restricting business cash payments to $10,000 is good but could be improved by applying to all cash and cryptocurrency transactions