Australian Government to ban Cash Purchases of AU$10,000 or More in 2019

Fintechist Australia Cash Ban

Cash payments remain incredibly popular in most countries. This poses a big problem for a government trying to curb this form of payment. Australia is taking a rather aggressive stance in this regard. The country is banning cash purchases for transactions over AU$10,00 come June 2019. This is on par with measures found in other countries around the world.

Making cash transactions for AU$10,000 or more illegal is a bit awkward. While it makes sense on paper, it leaves a strange taste in people’s mouths. The Australian Liberal Party government is taking the plunge regardless. Anything valued over $10,000 can no longer be paid in cash come June 2019. This is done to “encourage’ the transition to a digital society. Additionally, it is a move put in place to crack down on tax evasion.

Ending big Cash Purchases in Australia

These changes will pose big problems for criminals and gangs. Anyone trying to evade taxes will have to get a lot more creative. Additionally, it will also put the pressure on business owners to offer more digital payment solutions moving forward. Nor will there be any further discounts for paying in cash where big purchases are concerned. An interesting measure, although one that won’t be appreciated by everyone.

This ban also means such large payments will need to be made through different payment methods. Checks and credit or debit cards are viable options in Australia come July 2019. A new taskforce will be created to ensure this new regulation can be enforced. Known as the Black Economy Standing Taskforce, it will have an AU$300m budget to make sure the law is upheld at all times. With the proper team in place, an additional AU$3bn in tax revenue from criminal activity is expected to be collected.

It will be an uphill battle from day one, though. Especially the illegal tobacco trade will pose a significant challenge. Australia has the world’s highest tax rate on cigarettes. As such, the black market for these products is booming as of right now. This is also one of the primary outlets for cash in the country. With close to 37% of all commercial transactions still being made in cash, Australia isn’t ready for a switch to digital solutions just yet.

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