The Australian Banking Association has largely embraced the federal government’s proposal to limit cash payments to $10,000, but the lobby group has pushed back against increased compliance reporting.
On 23 May, Treasury released the Introducing an Economy-Wide Cash Payment Limit consultation paper, seeking stakeholder feedback on the announcement made in the 2018-19 budget to introduce a cash payment limit of $10,000.
The cash payment limit would mean transactions exceeding $10,000 would have to be made electronically or in cheque, with the aim to “stamp out opportunities for criminals to launder the proceeds of crime into goods and services and will make it harder for businesses to hide transactions to reduce their tax liabilities”, according to Minister for Revenue and Financial Services Kelly O’Dwyer.
However, in its submission to the consultation paper, the Australian Banking Association (ABA) said that while it “supports the government’s announcement,” there were four particular points to raise to avoid “lead[ing] to any unintended consequences or unnecessary red tape”.
Regarding the $10,000 limit set in relation to AML/CTF laws, the submission said: “We do not believe any additional reporting of cash payments or compliance by financial institutions should be introduced beyond those that currently exist under the AML/CTF regime.
“We believe these existing requirements on banks to report to AUSTRAC are sufficient for the Government to meet its objectives.”
In August 2017, AUSTRAC laid charges against the Commonwealth Bank of Australia for failing to provide 53,506 transaction reports on time for cash transactions of $10,000 or more.
On 8 March 2018, the major bank halved its daily cash deposit limits at CBA ATMs from $20,000 to $10,000.
Secondly, while financial institutions would be exempt from the cash limit, the submission argued that this exemption should be “for all cash transactions undertaken by a financial institution, not only deposits by individuals and banks”.
Thirdly, customers and businesses “heavily reliant on cash” as well as banks and financial services providers should have more time to prepare for the changes, the submission said.
“Finally, we seek one final point of clarification that the legislation will apply to payments only, and not any customer withdrawals of more than $10,000.”
ABA chief executive Anna Bligh said banks understood the importance of getting this policy right as they were "on the ground on the ground regularly talking with local business".
"It’s important that local shop owners, manufacturers and others are given enough time to adapt to this policy which for many of them will be a big change to the way they do business," she said.
“It’s also important that banks can continue to serve the economy by quickly distributing cash where needed therefore it’s important an exception is clearly made when it comes to this policy.”
Details of the proceedings that led to Mayfair 101 entity IPO Wealth being liquidated have been spilled by the trustee, with a review contai...
Senator Andrew Bragg has said the Liberal Party was wrong for initially voting against a number of wealth reforms as well as the royal commi...