Independent Review – Department of the Treasury
On 19 September 2019, the Minister for Housing and Assistant Treasurer introduced the Currency (Restrictions on the Use of Cash) Bill 2019. The proposed legislation would implement a recommendation of the Final Report of the Black Economy Taskforce, which the Government announced it would adopt in its response to the Taskforce’s Final Report in the 2018-19 Budget.
Under the proposed legislation, a cash payment limit of $10,000 will apply to transactions where one of the parties is involved for business reasons or for the purchase of real property.
The Black Economy Taskforce considered that cash can facilitate under-reporting of income and criminal transactions. However, the Taskforce also recognised that, despite the rise of non-cash forms of payment, cash continues to have an important role in the payments system, and provides convenience and accessibility for many people. Therefore, it was considered most important to constrain the use of cash in high-value transactions, where it is most abused. The proposed $10,000 limit is consistent with the threshold for the reporting of cash transactions in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Financial Transaction Reports Act 1988. Consultations by the Taskforce suggested that the majority of legitimate transactions would be unaffected.
The Department of the Treasury certified that the Black Economy Taskforce Final Report met the requirements of a Regulation Impact Statement (RIS). The Office of Best Practice Regulation does not assess the quality of independent reviews and RIS-like processes used in lieu of a RIS.
The Treasury was compliant with the Australian Government RIS requirements, but the Treasury was not consistent with best practice at the transparency stage. This is because a copy or a hyperlink to the Taskforce report was not included in the explanatory memorandum of the bill.
At the time of the decision the Treasury estimated average regulatory costs to be $17,100 a year.
The Black Economy Taskforce Final Report is available on this website at Black-Economy – Increasing the Integrity of Government Procurement.