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Thursday, 19 September 2019
Page: 3600

Mr SUKKAR (DeakinAssistant Treasurer and Minister for Housing) (09:44): I move:

That this bill be now read a second time.

This bill establishes the cash payment limit and introduces offences for entities that make or accept cash payments of $10,000 or more from 1 January 2020.

The Black Economy Taskforce final report found that large cash payments can be anonymous and untraceable allowing businesses to under-report their income and to offer consumers discounts for transactions that reflect the businesses' avoided obligations.

This practice has a profound negative impact on businesses that do the right thing. The vast majority of businesses that diligently pay their tax and meet their other obligations are not able to offer the same unfairly discounted price for their goods or services.

The cash payment limit sends a strong signal to the community that the government will protect the rights of honest businesses and their families from unfair competition from those who want to avoid their obligations.

The cash payment limit not only targets those avoiding their tax, but more importantly, and more crucially, it helps to fight organised crime syndicates. We know that large amounts of cash are essential to the business model of criminal gangs.

These gangs launder the cash from the proceeds of manufacturing and selling drugs and other serious crimes through the legitimate economy. The cash limit will make it harder for them to do so.

The government is committed to providing our intelligence agencies with the tools and laws that enable them to disrupt these activities.

This is not to say that consumers and businesses do not have legitimate reasons to conduct cash transactions, and the government recognises that cash remains an important part of the economy and a legitimate means of payment for individuals and businesses.

The cash payment limit will apply only to businesses and individuals that make or accept payments that involve $10,000 or more in cash, as I have noted. The majority of businesses' and individuals' daily interactions involving cash are unlikely to exceed the cash payment limit.

We are living in a time where a large majority of businesses now transact through electronic payment methods, which reduces their costs associated with the storage, transport, loss and monitoring of cash.

Importantly, the cash payment limit does not apply to private transactions (excluding real property transactions)—for example, the sale of a private car to another person.

All Australians will continue to be able to deposit and withdraw cash in excess of $10,000 into and from their accounts, and to store more than $10,000 of their money outside a bank.

Black economy activity is not simply a matter of under reporting income or tax evasion. It is a criminal matter. It can involve criminal activity to hide income through the exploitation of people, processes and systems.

Therefore, the government is sending a strong message to the community, and to criminal syndicates, more importantly, that using cash to avoid obligations and potentially engage in criminal activity is a serious matter that requires a sufficient level of deterrence. Contravening the cash payment limit carries with it a criminal offence provision, as noted earlier.

The penalties provide a balance between monetary penalties to deter the use of cash transactions to avoid tax obligations and jail for individuals and businesses involved in organised crime.

I would also like to acknowledge the work of Michael Andrew AO, whose passion and dedication to combat the black economy was instrumental in the introduction of this legislation. Unfortunately, Michael recently passed away, and I wish to pass on my condolences to his family. The government shares Michael's commitment to tackle the black economy to ensure a fairer environment for all Australians.

Full details of the measure are contained in the explanatory memorandum.