In a submission to a consultation paper seeking input on the implementation of the $10,000 limit announced in May’s Federal Budget, Big Four accounting firm KPMG said the proposal didn’t go far enough.
“We believe that a future cash payment limit of $5000 or even $2000 would be better suited to achieving the desired ‘crack down’ on black economy dealings,” the submission said.
“Although we do acknowledge that such a limit would further restrict the scope for Australians to conduct legitimate transactions in cash as a matter of personal preference, we submit this would be justified in light of the rationale underlying the proposal and the considerable public benefit that could be achieved.”
KPMG said it favoured a “low limit, high penalty” approach.
“An effective enforcement and penalties regime will be paramount to achieving the desired outcome, especially given the principal targets of the proposal are already deliberately avoiding the law,” it said.
To prevent attempts to circumvent the limit by splitting cash payments into smaller amounts, the accounting firm proposed applying the limit on a per-supplier basis over a specified time frame.
“For example, cash payments to a particular supplier would not be able to exceed $10,000 in any rolling 60-day period,” it said.
KPMG further recommended an “integrity measure” banning part-payments in cash for any sale over $10,000. “This would mean, for instance, that cash instalment payments or partial cash payments made as part of a transaction with a sale price of more than $10,000 would constitute a breach of the limit,” it said.
The firm said it could not think of any industries or transaction types that legitimately operate in large cash transactions that were unable to be made through the electronic payment system, nor were there any specific types of businesses or groups of individuals that should be exempt.
“We acknowledge that particular groups, including the elderly and those living in remote regions may be more reliant on cash, and may have less access to technology,” it said.
“However we think given the relatively limited number of transactions that exceed $10,000, it is reasonable to expect purchasers to pay by cheque, or another method, in light of the potential public benefit of the proposed limit.”
A spokesman for finance minister Kelly O’Dwyer said: “As part of its response to the Black Economy Taskforce Final Report, the government has committed to introducing a $10,000 limit on cash transactions from July 1, 2019.
“Public consultation on the design of the cash limit, including penalties, has recently concluded. The government will consider the feedback received as it finalises the design of the cash limit.”
Following the government’s announcement in May, Sydney small business owner Paul Thomas said the ban would “demolish” him.
“It’s going to screw me — 95 per cent of my business is cash collections,” Mr Thomas said.
“On a monthly basis, we could process and move up to $4-5 million — either picking up cash, processing and EFT-ing it to customers’ accounts, or recarrying it from customers to their bank branch.”
The 40-year-old said he had around 50 to 60 customers, nearly half of which were car yards. “All of my customers are legit operators, high-end car yards, money transfer depot stations,” he said.
Mr Thomas said the $10,000 limit would cause some businesses to stop accepting cash altogether, eliminating the need for armoured vans and security guards, with courier companies able to transport paperwork to banks.