Cash crackdown boss floats nano-chips in notes
By Frank Chung
THE man charged with cracking down on the “black economy” has revealed how he would like to keep track of your $100 and $50 notes.
Hi-tech nano-chips would be implanted in Australia’s “disappearing” cash under a plan floated by Michael Andrew, the head of the federal government’s Black Economy Taskforce.
Speaking to The Courier-Mail, Mr Andrew said too much cash was being hoarded under pensioners’ beds and stockpiled as a trusted currency in China.
Estimates for the size of Australia’s so-called black economy vary from $23 billion to $50 billion. The government claims tax avoidance through cash payments costs the budget up to $10 billion in revenue, money that could go towards funding welfare and other services.
In the May budget, the federal government announced an extra $32 million funding for the Australian Taxation Office to fund its cash crackdown, which it expects to bring in an extra $589 million in revenue over the next four years.
According to Mr Andrew, who will hand down his final report in October, there should be 14 $100 notes for every adult in Australia but there are fewer than that in circulation. While criminals prefer the $50 note, as the Reserve Bank pointed out in its defence of cash last year, foreign migrants and pensioners prefer $100s.
“You see a lot of Chinese don’t trust their banking system so they like to take Australian dollars back to China,” he told The Courier-Mail. “We’re seeing $100 notes used by pensioners because there’s an assets-based test at the moment and they like to keep a fair bit of cash under the bed.
“I’m working with the Reserve Bank and Austrac to get a better understanding of where our notes are. Clearly there’s a section of this that is organised crime. One of the options we would have is putting an expiry date on these notes.
“You could put a trace on some of these notes to see where they would go. You can use nano technology to put little chips in so you could then trace it.”
Last year, a report by UBS recommended Australia scrap the $100 note. According to UBS, benefits may include “reduced crime (difficult to monetise), increased tax revenue (fewer cash transactions) and reduced welfare fraud (claiming welfare while earning or hoarding cash)”.
Liberal Democrats Senator David Leyonhjelm at the time criticised the cash crackdown proposal, saying “the only people who are distressed by the cash economy are the government and the public servants who want to spend taxes”.
“The incentives for a cash economy would be a lot reduced if taxes were a lot lower,” he said in December. “It’s a reaction to the level of taxes we pay.”
Earlier this year, Revenue and Financial Services Minister Kelly O’Dwyer defended the move, saying “we don’t believe in a self-help approach to tax reform”.
“We think it should apply and be fairly represented across everybody,” she said. “There are always going to be people who try and avoid their tax, and [for]those in the cash economy it’s much easier to avoid detection.
“This comes at a time where we’re experiencing rapid technological change. A lot of people under 40 don’t really carry that much cash around anymore, but even despite this we have seen an increase in the number of $100 notes in distribution.
“I don’t know too many people who walk around with $100 notes, I certainly haven’t sighted one in a long time, but the point is that there is clearly an issue that we need to grapple with.”
This article (Australian Government: Cash Should Be Tracked with Nano-Chips) was originally published on News.com.au and syndicated by The Event Chronicle.