Is this the end of the cash economy?
A long-time favourite of tradies, pensioners and drug dealers, $100.00 notes are rarely sighted.
It’s a curious fact, given that there is around $30 billion worth of them in circulation (or 12 for every Australian). Now, as the Federal Government watches its Triple-A credit rating go down the toilet, it seems that cash jobs are in their sights as a last-ditch effort to prove the economy is undergoing at least some sort of reform.
Suddenly, a new task-force has been announced to tackle the tax revenue that is missing from the system. So, could this be the end of the humble $100.00 note?
On ABC Radio National this morning, the Minister for Revenue and Financial Services, Kelly O’Dwyer, left the possibility on the table, refusing to rule anything out that might catch out those doing a cheap job for cash.
The idea reflects recent action in India where, suddenly, the Government declared that the 500 and 1000 rupee notes were no longer legal currency. India is renowned for its cash and corruption, so much so that key infrastructure is simply unaffordable due to the absence of tax receipts in a fast-growing economy.
The impact was immediate and immense. Long queues formed at banks to exchange notes that had been hoarded for years. Also, there was an instant loss of cash within the system, so people were unable to pay for fresh foods. Small-time retailers felt the pinch as financial institutions struggled to supply the smaller denominations. A month later, illegal exchange and money laundering is continuing at a high rate.
Australia has adopted tap-and-pay systems, so it’s hard to imagine this sort of economic Armageddon occurring after a shock announcement to remove $100.00 from the system. But, hey, so long as they also take the 5c piece it will be an easy sell.