Currency (Restrictions on the Use of Cash) Bill 2019 (2024)

The Bills Digest at a glance

Purpose of the Bill

The purpose of the Currency(Restrictions on the Use of Cash) Bill 2019 (the Bill) is to createoffences where an entity makes or accepts cash payments of $10,000 or more incertain circ*mstances. Cash includes both physical and digital currency.

About the offences

Clause 12 creates criminal offences for entitiesthat:

• make or accept a payment in cash where the cash is $10,000 or more or
• make or accept a series of payments for a supply or gift where the total amount of cash is $10,000 or more.

Strict liability applies to some of the physical elementsof the offence under clause 12 and the maximum penalty that may beimposed is 60 penalty units—currently equivalent to $12,600.

Clause 13 creates a criminal offence based on thesame physical elements as in clause 12 but requires that a fault element isalso proven. The maximum penalty that may be imposed under clause 13 istwo years’ imprisonment and/or 120 penalty units—currently equivalent to $25,200.A court may impose a maximum penalty on a corporation that is up to five timesthe amount that can be imposed on a natural person.

Defences

The Rules made under the Bill allow the Minister, by wayof legislative instrument, to provide that the proposed offences do not applyto:

• the making or acceptance of a payment of a kind specified by the Rules or
• the making or acceptance of a payment in circ*mstances specified by the Rules.

The Bill applies special rules for determining thecriminal liability of entities that are not legal persons and also allows for thecontrollers of such entities to be held criminally liable.

Commencement

The Bill is set to commence on 1 January 2020. However,Treasury has stated that it is the Government’s intention that the Bill willnot apply retrospectively. Accordingly, the commencement date will have to beamended.

Purpose ofthe Bill

The purpose of the Currency(Restrictions on the Use of Cash) Bill 2019 (the Bill) is to create offenceswhere an entity makes or accepts cash payments of $10,000 or more in certaincirc*mstances.

Structure ofthe Bill

The Bill consists of three Parts:

• Part 1 sets out preliminary matters including the commencement, objects of and definitions applicable to the Bill
• Part 2 sets out the proposed offences for making or accepting cash payments and allows the Minister to create exceptions to the offences by way of legislative instrument and
• Part 3 sets out how the proposed offences apply when the entity is not a legal person, the recovery of fines from the assets of certain entities and enables the Minster to make ‘rules’ by way of legislative instrument.

Background

About the black economy

There is no internationally agreed definition of the blackeconomy and definitions vary within Australia. Generally speaking it covers activitieswhich take place outside the tax and regulatory systems involving both legaland illegal activities.[1]

Cash is used in the black economy because, unlike some electronictransactions, it does not leave an obvious audit trail.[2]Non-compliance with taxation obligations enabled by the use of cash alsoprovides businesses with an unfair competitive advantage by being able to offergoods and services at a discount.[3]

BlackEconomy Taskforce

The measures contained in the Bill were announced by theGovernment in the 2018–19 Federal Budget and form part of the Government’sresponse to the Black Economy Taskforce’s (the Taskforce) final report: Black EconomyTaskforce: Final Report—October 2017 (Final Report).[4]

The Taskforce was chaired by Michael Andrew AO (the formerChair of the Board of Taxation) and was established in December 2016 to developa multi-pronged policy response to combat the black economy in Australia.[5]

The Taskforce’s Final Report was provided to theGovernment in October 2017 and publicly released with the 2018–19 Budget.[6]The release was also accompanied by the Government’s response Tacklingthe Black Economy: Government Response to the Black Economy Taskforce FinalReport (Government Response).[7]

The Bill is part of a range of legislative measuresenacted by the 45th Parliament and under consideration by the currentParliament to implement various recommendations contained in the Final Reportas well as those recommendations contained in the Taskforce’s Black EconomyTaskforce: Interim Report—March 2017.[8]

Further information on the black economy, including thedrivers, consequences and measures announced in the 2018–19 Budget aimed ataddressing the black economy can be found in the Parliamentary Library’s Budget Review2018–19 under the heading‘Targeting the black economy’.[9]

Size of the black economy

AustralianBureau of Statistics

In 2012, the Australian Bureau of Statistics (ABS)estimated that ‘underground production’ or the ‘cash economy’ accounted for 1.5per cent of Australia’s Gross Domestic Product (GDP).[10]According to the Taskforce, this amounted to approximately $25 billion in 2017money.[11]

Taskforce

In its Final Report the Taskforce stated that the blackeconomy is larger than estimated by the ABS in 2012 and could be as large as threeper cent of GDP; in 2015–16 this equated to $50 billion.[12]However, the Taskforce’s definition of the black economy takes in a broaderrange of conduct than that considered in the ABS study.[13]The Taskforce also considered that it is likely that certain elements of theblack economy are continuing to grow as a result of a combination of ‘strongincentives, poor transparency and limited enforcement’.[14]

Reserve Bankof Australia

Relying on the ABS’s and Taskforce’s methodology, theReserve Bank of Australia (RBA) estimates that there was underground productionof around $41.5 billion and illegal production of roughly $12.5 billion in2017–18.[15]The RBA uses the term ‘underground production’ to refer to the deliberateconcealment of legal activities to avoid tax payments and ‘illegal production’to refer to activities forbidden by law where there is mutual consent, such asillegal drug production and sale.[16]

Use of cashas a payment method

While there are various reports on the use of cash in theeconomy, there is no comprehensive reporting on the use of cash for transactionsof $10,000 or more.

The RBA’s 2016 triennial ConsumerPayments Survey (CPS) ‘provides a nationally representative dataset on howAustralian consumers make their payments and how this has changed over time’. TheCPS shows a consistent decline in both the use of cash as a payment method andthe value of cash payments as a proportion of total payments.[17]Table 1: use and value of cash as a payment method, shows the use of cash forlower value transactions but does not include transactions of $9,999 ormore.

Table 1: useand value of cash as a payment method

Source: MA Doyle, C Fisher, E Tellez and A Yadav, How Australianspay: evidence from the 2016 Consumer Payments Survey, Research discussionpaper, 4, 2017, RBA, 2017, p. 2.

While the use of cash payments for consumer transactions remainsthe most common payment method for lower-value transactions (in 2016 this wasfor transactions under $10), this too has been in decline since 2007 when cashwas the most common payment method for payments under $41.[18]

Certain entities that receive or facilitate payments arerequired to report transactions of $10,000 or more to the Australian TransactionReports and Analysis Centre (AUSTRAC)—these are known as threshold transactionreports (TTRs); 2.6 million TTRs (that is, transactions of $10,000 or more) weresubmitted to AUSTRAC in 2018–19 and 3.9 million submitted in 2017–18.[19]AUSTRAC reporting requirements are discussed in greater detail under theheading ‘Role of AUSTRAC’.[20]

Use of cashin the black economy

The Reserve Bank of Australia is the sole issuer and redeemerof Australian banknotes. This means that we know exactly how many banknoteshave ever been printed and issued to the public, and how many banknotes, at theend of their life, have been returned to the Reserve Bank and destroyed.[21]

The RBA recently estimated that there were approximately $76billion (as at June 2018) worth of outstanding Australian banknotes.[22]The RBA estimates that the outstanding banknotes fall into the followingcategories:

• banknotes used to facilitate legitimate day-to-day transactions in Australia
• banknotes that are held, either domestically or overseas, as a store of value, for emergency liquidity or other such purposes (referred to as hoarding)
• banknotes used in the shadow economy (either to conceal legal transactions to avoid tax, to pay for illegal goods or to store wealth generated by the sale of illegal goods) or
• banknotes that have been lost or destroyed.[23]

The RBA emphasised that any attempt to estimate whereoutstanding banknotes are, and for what purpose they are being used, is ‘anapproximation at best’.[24]This uncertainty is understandable—previous research conducted by EUROPOLstated ‘the nature of cash means that there is little, if any, concrete dataavailable beyond figures around the volume and value of bank notes issued andin circulation’.[25]Nevertheless the RBA’s research indicates:

1.around15 to 35 per cent of outstanding banknotes are used to facilitate legitimatetransactions within Australia;

2.roughlyhalf to three-quarters of outstanding banknotes are hoarded; of this, wecan allocate
10–20percentage points to domestic hoarding [by Australian residents],and up to 15 percentage points to international hoarding [by foreigners];

3. around4 to 8 per cent of outstanding banknotes are used in the shadow economy, ofwhich,
3–5percent are used to conceal legal transactions, 1–2 per cent areused to purchase illegal drugs, and up to 1 per cent are used to store profitsfrom illegal activity; and

4.around5 to 10 per cent of outstanding banknotes are actually lost.[26][emphasis added].

While the RBA makes no attempt to estimate the value oftransactions over $10,000, it does rely on the Taskforce’s estimation of thesize of the black economy and estimates ‘around $5 billion of cash, or around sevenper cent of the value of banknotes on issue, is used to facilitate shadoweconomy activities’.[27]Three-quarters are used in ‘underground production’ ($3.75 billion) and onequarter in illegal production ($1.25 billion). However, this assumes that allof these transactions are made in cash, an assumption which the RBA considersis ‘likely incorrect’.[28]

The research conducted by the RBA also found that ‘thetotal cash hoarding by the illicit drug supply chain is in the range of $40million to $1 billion’. However, by relying on the difference between drugsuppliers cash holdings (on average two per cent of the value of their stock ofdrugs) and the value of all assets gained through crime (approximately 11 percent of the value of the stock of drugs held), the RBA found that a large shareof cash profits is converted into other assets.[29]

Taskforce recommendations

During its consultation, the Taskforce ‘heard examples oflarge undocumented cash payments being made for houses, cars, yachts,agricultural crops and commodities’.[30]According to the Taskforce, a cash transaction ‘makes it easier for businessesto underreport income, and to offer consumers discounts for transactions thatreflect avoided obligations’, for example, the avoidance of income tax and GSTobligations, while also potentially accessing social security benefits.

Accordingly, the Taskforce recommended an economy-widecash limit of $10,000, the objective of which is to ‘reduce the ease with whichblack economy transactions may be made’.[31]While the Taskforce considered that the measure would have a positive effect onCommonwealth revenue owing to increased collection of income tax and GST, itnoted that implementation may involve an increase in government expenditure,for example, as a result of the enforcement and penalty systems.[32]

Consultationon the proposed cash ban

Treasury embarked on a public consultation about thepolicy design of the cash payment limit from 24 May 2018 to 1 July 2018. Submissionsare available on the Treasurywebsite.[33]On 26July2019, Treasury released exposure drafts of the Currency(Restrictions on the Use of Cash) Bill 2019 and other related instruments.[34]

The consultation resulted in a number of submissions fromindustry stakeholders such as the Australian Banking Association, NationalRetail Association, NSW Farmers Association, the Law Society of New South Walesand Star Entertainment Group. Submissions were also received from a large numberof individuals. In total, 3,620 submissions were received including 198confidential/non-publishablesubmissions.[35]According to Treasury, the majority of submissions that did not come fromindustry or regulators ‘discussed common themes, such as the cash payment limitreducing civic freedoms, concerns with negative interest rates and bank-bail-insand unduly restricting the way cash can be used and stored outside of banks’.[36]

Treasury has subsequently released the Currency(Restrictions on the Use of Cash) Rules 2019 as an exposure draft (ExposureDraft Rules) which, among other things, contains proposed carve-outs from the criminaloffences contained in the Bill.[37]

Effectivenessof Cash limits

The proposed cash payment limit is not unique toAustralia, a number of other countries, including several countries in Europe,have cash transaction limits. The European Consumer Centre France cashpayment limitations details those European Union countries which have acash limit in place. For example, in France, French residents may make cashpurchases of up to the value of €1,000 for goods from traders; for non-residents,the limit is €15,000. Both parties are liable for a penalty of up to five per centof the amount paid where it exceeds the limit.[38]Multiple other European States have implemented cash transaction limits,including, for example, Belgium, Greece, Italy and Poland—cash paymentthresholds appear to vary between €1,000 and €15,000.[39]

There is limited analysis available on the effectivenessof cash payment limits in reducing the black economy; Friedrich Schneider undertooksome analysis of cash restrictions and reporting in the 2017 paper Restrictingor Abolishing Cash: An Effective Instrument for Fighting the Shadow Economy, Crimeand Terrorism? Schneider concludes: ‘[t]he available evidence suggeststhat restrictions on cash use will probably reduce profits from crime, but willcertainly not eliminate them’.[40]The reduction in shadow economy activity as a result of restrictions on the useof cash could be between two and 20 per cent depending on the measure.[41]However, Schneider also considers ‘the abolishment or strict limitation of cashcarries the risk of seriously weakening trust in state authorities’ and ‘alimitation or abolition could only be justified by sound reasons and largebenefits’.[42]

Other assessments indicate that so long as the thresholdis set at an amount above the value of everyday consumer transactions, thesocial benefits of cash are not necessarily eroded. This is based on evidence that‘law-abiding’ citizens are increasingly using other payment methods tofacilitate large transactions (€1,000 or more) rather than relying on cash.[43]In Limitingthe Use of Cash for Big Purchases: Assessing the Case for Uniform Cash Thresholds,the authors consider that an effective cash payment needs to be ‘at a levelwell above the purchase price of most consumer durables, but low enough tocapture the purchase of vehicles and luxury items’.[44]This appears consistent with the RBA’s observations regarding cash transactionsin Australia—that is, large household transactions are not commonly facilitatedby cash:

When we look across the five household surveys we'veundertaken since 2007, we have a total of about 82,000 consumer payments by5,700 individuals. Among those 82,000 payments, there were 20 transactionsreported for more than $10,000. None of those used cash. But, to geta slightly bigger sample of large transactions, we might look instead attransactions between $5,000 and $10,000. Altogether, there were 61transactions over $5,000. One of these was in cash. Nearly half of thesetransactions used bank transfers, while other payment methods included cheques,credit cards, BPAY, debit cards and PayPal in that order. So, while we cannotrule out some reporting bias, including because some people may bereluctant to report all their spending for privacy reasons, our surveysuggests that very large transactions by households are very infrequentand, when they occur, they use electronic payment methods or occasionallycheques.[45][emphasis added]

ECORYS’ and the Centre for European Policy Studies’ Studyon an EU Initiative for a Restriction on Payments in Cash: Final Reporthighlights the targeted nature of cash restrictions—their effectiveness largelydepends on the threshold that is set. In relation to curbing money laundering,cash payment limits are likely to be most effective in preventing the purchaseof high-value consumer goods but do little to prevent the regular purchase oflow to medium value goods because they will fall below the threshold.[46]In the case of curbing tax evasion the authors conclude that a high threshold ‘wouldnot fulfil the purpose of reducing tax evasion’ because ‘the vast majority oftax evasion cases concern small amounts and would not be affected’.[47]Cash payment limits are also likely to have limited effect, if any, incirc*mstances where cash generated from crime is hoarded, re-invested intoillegal activities or in cases where reporting obligations already exist underthe anti-money laundering/counter-terrorism financing (AML/CFT) regimediscussed immediately below.[48]

Role of AUSTRAC

The Anti-MoneyLaundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)requires a reporting entity that provides a designated service to a customer involvinga threshold transaction, to report the transaction to AUSTRAC.[49]

A ‘threshold transaction’ known as a ‘TTR’, is atransaction involving the transfer of physical currency of $10,000 or more. A reportingentity means a person who provides a designated service.[50]Section 6 of the AML/CTF Act sets out the services which are designatedservices and is summarised by AUSTRAC:

A service that is listed in section 6 of the AML/CTF Act(because it has been identified as posing a risk for money laundering andterrorism financing) and which meets thegeographical link.Designated services include a range of business activities in the financialservices, bullion, gambling and digital currency exchange sectors. Entitiesthat provide any of these services arereporting entities.[51]

TTRs[52]fortransfers of $10,000 or more in cash (or the foreign currency equivalent) mustbe submitted by a designated entity within ten business days of the date of thetransaction.[53]AUSTRAC can, among other things, apply for a civil penalty order from theFederal Court of Australia for failing to comply with reporting obligations.[54]

FinancialTransaction Reports Act 1988

The FinancialTransaction Reports Act 1988 (FTR Act) was largely replaced bythe AML/CTF Act but still operates in relation to some entities that arenot subject to the AML/CTF Act. In particular it applies to solicitors andcar dealers acting as intermediaries who provide insurance or act as insuranceintermediaries. Solicitors are required to report any transaction of $10,000 ormore in physical currency to AUSTRAC.[55]Similarly, motor vehicle dealers who provide insurance or act as insuranceintermediaries must also report cash transactions of $10,000 or more to AUSTRAC.[56]

Committee consideration

SenateEconomics Legislation Committee

The Bill was referred to the Senate Economics LegislationCommittee (the Committee) for inquiry and report by 28 February 2020. Detailsof the inquiry are at the inquiryhomepage.

Submissions closed on 15 November2019. The Committeereceived a total of 2,659 submissions. The Committee resolved to publish 147submissions which represent a selection of recurring views expressed bystakeholders. According to the Committee:

The committee has read and examined all submissions to the inquiryand while they are not all published, they will be referenced and discussed inthe inquiry report as concerns regarding the bill alongside discussionregarding those submissions that directly addressed the provisions of the billitself.[57]

Public hearings were held in Canberra on 12 December 2019and in Sydney on 30 January 2020.[58]

The Committee delivered its report into the inquiry on 28February 2020. The Committee recommended the Bill be passed contingent on thefollowing recommendations:

• recommendation 1—noting the evidence from CPA Australia and others, the Government review existing powers and trends in the digital economy to assess whether the Bill is the most effective response to the black economy
• recommendation 2—the Government review the penalty provisions, particularly in relation to one-off breaches as opposed to repeated offences, which are more likely to be money laundering and tax evasion, to ensure they are not overly harsh
• recommendation 3—the Government respond to concerns raised by the Australian Small Business and Family Enterprise Ombudsman, and others, regarding the availability of electronic banking services (ATMs and internet banking) in remote and regional Australia, including during natural disasters, and whether there will be a detrimental economic impact on those areas
• recommendation 4—the Government assess the impact of the Bill on particular migrant communities, particularly in relation to funerals, to determine if there are potential negative impacts
• recommendation 5—the commencement date of the Bill be extended, and that a final agreed date be informed through consultation with business to allow sufficient time for businesses to implement system changes and undertake training, as required
• recommendation 6—the Government develop a communications strategy to assist in dispelling some of the unsubstantiated claims regarding the Bill. The strategy needs to be in place before the commencement of the Bill to allow sufficient time to inform the public and businesses of their responsibilities and
• recommendation 7—the exemption for payments relating to personal and private transactions be provided for directly in the Bill.[59]

AustralianGreens’ dissenting report

Australian Greens’ Senator Peter Whish-Wilson issued adissenting report recommending the Bill be opposed.[60]In summary, the Greens consider the Bill should be opposed for the followingreasons:

• cash offers an individual the ability to transact anonymously outside the banking system—there needs to be a thorough consideration of individual privacy and societal norms if individual’s transactions are going to be subject to further scrutiny[61]
• the Bill is a step toward the abolition of cash—this is of concern because cash provides the ability to transact when digital systems are disrupted. Further, an abolition would provide greater control over individuals’ money should negative interest rates be implemented[62]
• there are other mechanisms to reduce tax avoidance and money laundering, including for example, by including real estate agents, accountants and lawyers within the remit of the AML/CTF laws[63] and
• the use of strict liability offences is ‘heavy-handed’.[64]

SenateStanding Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutinyof Bills Committee) raised concerns about:

• the use of delegated legislation to carve out exceptions to the proposed offences and
• the appropriateness of penalties that may be imposed for contravention of the proposed offences.[65]

Using delegated legislation

Clauses 12 and 13 of the Bill create newcriminal offences for entities that accept or make a payment in cash where thecash equals or exceeds $10,000. Subclauses 12(5) and 13(3) enablethe Minister to, by way of legislative instrument, provide that the proposedoffences do not apply to:

• the making or acceptance of a payment of a kind specified by the rules or
• the making or acceptance of a payment in circ*mstances specified by the rules.

The Scrutiny of Bills Committee considered that unlessthere is an adequate justification for doing so, the primary legislation shoulddeal with such ‘significant matters’ rather than being left to delegatedlegislation. The Scrutiny of Bills Committee stated that the need forflexibility, which is the justification provided in the Explanatory Memorandum,is not, of itself, an adequate justification.[66]The Committee requested that the Minister provide detailed advice as to:

• why it is considered necessary and appropriate to leave the exceptions to the offences to delegated legislation and
• whether it would be appropriate for the Bill to be amended to include a non-exhaustive list of the currently known kinds of transactions that will be exempt, with further kinds of exempt transactions able to be specified by the rules.[67]

The Minister’s response to the Scrutiny of Bills Committeeindicated that having exceptions to the proposed offences both in the primarylegislation and the rules ‘would be cumbersome and introduce unnecessarycomplexity’. As flexibility was required to establish new defences, theMinister considers that the rules are the most appropriate place for thedefences.[68]

Notwithstanding the Minister’s response, the Scrutiny ofBills Committee does not think that the Minister has adequately justified theneed for the defences to be determined by delegated legislation.[69]

Appropriatenessof penalties

The maximum penalty that may be imposed on an entity underclause 12 is 60 penalty units (currently equivalent to $12,600) andunder clause 13, 120 penalty units, (currently equivalent to $25,200)and/or two years imprisonment.[70]

The Scrutiny of Bills Committee noted that the ExplanatoryMemorandum does not provide any specific justification for the proposed penaltythat can be imposed under clause 13 nor does it provide anyconsideration of comparable penalties for other offences in Commonwealthlegislation as required by the Guide toFraming Commonwealth Offences, Infringement Notices and Enforcement Powers.[71]Accordingly, the Scrutiny of Bills Committee requested that the Minster providejustification for the custodial penalty under clause 13 and specificexamples of applicable penalties for comparable Commonwealth offence provisions.[72]

In response to thatrequest, the Minister provided information about the comparable offences in theCriminal Code.[73]The Scrutiny of Bills Committee requested that the information provided by theMinister be included in the Explanatory Memorandum, but was otherwisesatisfied.[74]

Policyposition of non-government parties/independents

AustralianLabor Party

The Australian Labor Party (Labor) did not oppose the Billin the House of Representatives (the House).[75]In his second reading speech on the Bill, Labor’s Stephen Jones acknowledgedthe considerable community concern with the Bill and recommended the ‘swiftpassage’ of the Bill to the Senate ‘where it may be further interrogated andinvestigated’.[76]

Labor Senatorsformed part of the Committee inquiry into the provisions of the Bill, which recommendedthe Bill be passed contingent on seven wide-ranging recommendations (as set outabove under Senate Economics Legislation Committee).

Katter’sAustralian Party

Bob Katter voted against the Bill in the House citingconcerns with the ability of businesses to be able to store and trade in cashin times of crisis and also considered that the Bill amounts to ‘Big Brother iswatching’ legislation.[77]

Bob Katter reiterated his position in March 2020; MrKatter further cited concerns that businesses would be prevented fromtransacting where digital transactions methods have been disrupted— because forexample, a natural disaster has occurred.[78]On 5 March 2020, Mr Katter attempted to highlight the impact the Bill wouldhave by purchasing $19,000 worth of gold bullion with cash, reportedly stating:‘In a few weeks’ time that will be illegal ... Your right to this legal tender isbeing taken off you’.[79]

AndrewWilkie

Andrew Wilkie voted against the Bill in the House, citing amongother things, considerable community angst with the proposed offences.[80]Mr Wilkie emphasised that there are existing laws to address criminal activity,but considers those laws are not being enforced.[81]

Mr Wilkie also expressed concerns about the potentialeffect the Bill might have should Australia experience negative interest rates.[82]

CentreAlliance

Centre Alliance’s Rebekha Sharkie voted against the Billin the House; however, in her second reading speech, Ms Sharkie stated thatCentre Alliance ‘will reserve its position in the Senate until the Senateinquiry into the bill concludes’.[83]

Ms Sharkie cited a number of concerns with the Bill,including, among other things, that the Bill is an ‘unreasonable restriction’on peoples’ ‘personal freedom’ and that it criminalises other innocent conduct.[84]

Ms Sharkie echoed the concerns expressed by Mr Wilkieregarding an alleged failure to enforce existing laws, particularly thoseadministered by AUSTRAC. In addition, she considered that older Australians wholive in regional areas would be disadvantaged by the Bill.[85]

Centre AllianceSenator Rex Patrick formed part of the Committee inquiry into the provisions ofthe Bill, which recommended the Bill be passed contingent on seven wide-rangingrecommendations (as set out above under Senate Economics LegislationCommittee).

TheAustralian Greens

The Australian Greens’ Adam Bandt voted against the Billin the House.[86]Senator Whish-Wilson also issued a dissenting report to the Committee inquiryinto the provisions of the Bill recommending that the Bill be opposed (theGreens’ reasons are discussed above under the heading ‘Australian Greens’dissenting report’).[87]

PaulineHanson’s One Nation

In a Facebookpost from August 2019, Pauline Hanson’s Please Explain stated that PaulineHanson’s One Nation would not be supporting the Bill.[88]The Facebook post states that it is an attempt to move cash into the bankingsystem so that it will be spent on consumption and contribute to economicgrowth.

Position ofmajor interest groups

Communityconcerns

The development of the Bill has generated significantcommunity interest as evidenced by the number of submissions to Treasury duringits consultation and to the Senate Economics Legislation Committee in responseto its current inquiry. Common grounds on which individual submitters and somestakeholder groups oppose the Bill include:

• it is an unnecessary encroachment on peoples’ civil and economic liberties
• little evidence has been provided by the Government that the proposed measures will be effective in achieving the objects of the Bill and
• an objective of the Bill is to compel people to move their cash into the banking system and that this should be opposed for the following reasons:
  • people will be restricted to using the banking system to make large purchases and may incur transaction fees which they may not have incurred had they paid in cash
  • people have concerns about a perceived ‘bank bail-in’ or the effect that possible negative interest rates may have on their savings.[89]

It should be noted that in relation to the issue ofnegative interest rates, Head of Payments Policy at the RBA, Dr Tony Richards,has flagged that ‘[t]here are almost no examples of negative interest rates forhousehold deposits in those few countries that have had negative policy rates’.[90]

Groups in favour of the Bill

Stakeholders such as Chartered Accountants Australia andNew Zealand (CAANZ) and Uniting Church in Australia (Synod of Victoria andTasmania) are in favour of the Bill on the grounds that it is likely to beeffective in reducing black economy activity by requiring large transactions tobe facilitated through some means other than cash that leaves a reportingtrail.[91]

Such groups also support Treasury’s position that the Billis unlikely to affect ‘everyday transactions’ and it is a necessary measure toprevent businesses who are engaged in black economy activity from gaining acompetitive advantage over businesses that are not.[92]

Industry groups that oppose the Bill

Industry groups that oppose the Bill include the CharteredPracticing Accountants Australia (CPA), NSW Farmers Association, HousingIndustry Association (HIA), the Australian Chamber of Commerce and Industry,Gumtree, The Citizens Party (formerly the Citizens Electoral Council) and theAustralian Taxpayers Alliance.[93]It should be noted that some groups generally state their support for theobjectives of the Bill, but consider that the measures are not the mostappropriate means of achieving this outcome.[94]

Grounds on which the Bill is opposed include that a moreappropriate means could be used to achieve the objects of the Bill and, ascurrently drafted, the objects of the Bill are unlikely to be achieved, whetherbecause:

• those engaged in shadow economy activity are likely to continue to engage in such activity notwithstanding the ban or
• the limit of $10,000 is at a level that it is unlikely to capture the majority of transactions which undermine the integrity of the tax system.[95]

For example, HIA submits that the ‘Bill will have littleeffect on tax leakage and criminal activities associated with large cashpayments’, because, among other things, and in the context of the residentialbuilding industry, the black economy ‘most likely involve[s] payments of lessthan $10,000, rather than over $10,000’.[96]Outside the owner-builder context, payments over $10,000 are likely to be‘recorded and paid electronically or by cheque’.[97]Similarly, CPA Australia expressed its concern ‘about the lack of a strongevidence-based case to justify the contravention of existing criminal lawprinciples and the proposed criminal penalties’.[98]

Additional issues

Notwithstanding stakeholders’ particular positions on theBill, there are a number of additional issues which have been identified by stakeholders,including:

• allowing the Minster to, by way of legislative instrument, effectively control the scope of the proposed offences by way of exemptions to the offences[99]
• the lack of any one particular Government agency having oversight of the measure[100]
• the limited time available to communicate with the public and implement business systems to account for the changes[101] and
• the imposition of strict liability criminal offences absent any substantial defences, particularly in the context of employees acting within the scope of their employment.[102]

Financial implications

The Explanatory Memorandum states that the Bill isexpected to have an ‘unquantifiable impact on revenue over the forwardestimates period’.[103]The 2018–19 Budget states: ‘[t]here is no quantifiable estimated impact of thismeasure in isolation. However, this measure is expected to support the measureson the black economy and associated revenue’.[104]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessedthe Bill’s compatibility with the human rights and freedoms recognised ordeclared in the international instruments listed in section 3 of that Act. TheGovernment acknowledged that the Bill engages the right to the presumption ofinnocence and the right to privacy but considers that the Bill is compatiblewith those rights.[105]

ParliamentaryJoint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (HumanRights Committee) considers that the Bill engages the right to privacy becausethe effect of the Bill is to require a person to use a digital means oftransacting which, ‘creates records of an individual’s private activities andexpenditure’.[106]The Committee states that limitations on the right ‘will be permissible wherethey pursue a legitimate objective, are rationally connected to that objectiveand are a proportionate means of achieving that objective’.[107]

The Human Rights Committee accepts that that protection ofthe integrity of the tax system and other Commonwealth laws to preventparticipation in the black economy is ‘likely to be a legitimate objective’ andthe measure is rationally connected to achieving this objective.[108]However, the Committee considers that the Statement of Compatibility with HumanRights contained in the Explanatory Memorandum to the Bill does not consider ‘howthe impact of the bill on individuals’ privacy is proportionate to theobjective of reducing the costs of black economy activity’.[109]

The Human Rights Committee takes the view that the cashpayment limit of $10,000 assists with the measure being proportionate, butdraws the attention of the Minster and Parliament to the fact that if thecash payment limit were lower, the Committee would ‘expect a more detailedjustification for this limitation’.[110]

Key issues and provisions

Purpose ofthe Bill

The objects of the Bill are set out in clause 3:

• the principal object is to protect the integrity of the Commonwealth taxation system by preventing the use of cash in order to avoid scrutiny by the Commissioner of Taxation (the Commissioner) and
• a secondary object is to protect the integrity of other laws.

Creation ofoffences

Clauses 12 and 13 of the Bill createcriminal offences for entities that make or accept certain cash payments. Theoffences apply both in respect of a single cash payment as well as in the caseof series of cash payments that exceed $10,000.

Offence: singlepayment that is $10,000 or more

Subclauses 12(1) and 13(1) provide that anentity commits an offence if:

• the entity makes or accepts a payment to/from another entity
• the payment is or includes an amount of cash and
• the value of the cash equals or exceeds the cash payment limit.[119]

Offence:series of payments that total $10,000 or more

Subclauses 12(3) and 13(2) provide that anentity commits an offence if:

• the entity makes or accepts a payment to/from another entity
• the payment is part of a series of payments that are made for a supply or as a gift
• the payment is or includes an amount cash and
• the total value of all amounts of cash equals or exceeds the cash payment limit.[120]

Key issue—seriesof payments made for a supply or as a gift

Supply is defined by reference to thedefinition of ‘supply’ in section 9-10 of the A New Tax System(Goods and Services Tax) Act 1999 (GST Act). It is defined inthat provision as follows: ‘a supply is any form of supply whatsoever’.[121]According to the Explanatory Memorandum to the Bill:

To constitute a series of payments, the payments must be forthe same supply or part of a single gift. It is not sufficient that thepayments occur between the same parties, even if they occur on a regular basis,where distinct things are supplied.[122]

The Explanatory Memorandum to the Bill provides examples ofa ‘series of payments made for a supply’ that are likely to be captured by subclauses12(3) and 13(2), including, the purchase of a car or the payment ofa package holiday by instalments.[123]

However, the definition of supply ismodified by clause 10 so that payments for a supply which is made on aperiodic basis are not captured, for example, the payment of rent on a periodicbasis for a property.[124]

An example of a series of payments that constitute a gift,would be an individual providing ‘a very substantial donation to a charity inthree instalments paid annually – each of the separate payments under theagreement is part of the one committed pledge’.[125]

Stakeholdercomments

Notwithstanding the inclusion of clause 10 in theBill, CPA submits that it is still likely to give rise to interpretational andadministrative difficulties as it will be necessary to determine ‘what is a “periodicbasis”’ or a “periodic component”’.[126]

In practice, this is going to require businesses to put inplace systems to account for a series of payments they receive from theircustomers, for example, as submitted by the Law Council of Australia (LCA),‘fundamental reconfiguration’ of business systems will be required:

While the basic proposition of the Bill is very simple, thecompliance requirements to implement it are far reaching, complex, andwill require fundamental reconfiguration of the accounting systems of allbusinesses that accept cash or digital currency, to recognise and trackcash payments including instalment payments.[127][emphasis added]

It also appears that there are circ*mstances in whichinterpretational difficulties may arise, for example HIA takes the view thatthe payments for each stage of completion for the construction of a residentialhome will constitute a separate supply, however, ‘HIA understands that underthe Bill construction work is to be considered as one ‘supply’ and thereforethe proposed offence would apply where the cumulative cash amounts taken equalsor exceed $10,000’.[128]

Key issue—cashand the cash limit

For the purposes of the Bill, cash includesboth physical and digital currency—these terms are defined by reference to the AML/CTFAct.[129]

Physical currency means the coin and printed money (whetherof Australia or of a foreign country) that is designated as legal tender andcirculates as, and is customarily used and accepted as, a medium of exchange inthe country of issue.[130]

Digital currency means a digital representation of valuethat:

• functions as a medium of exchange, a store of economic value, or a unit of account
• is not issued by or under the authority of a government body
• is interchangeable with money (including through the crediting of an account) and may be used as consideration for the supply of goods or services and
• is generally available to members of the public without any restriction on its use as consideration.[131]

The Anti-Money Launderingand Counter-Terrorism Financing Rules Instrument 2007 (No. 1) (AML/CTFRules) may otherwise declare a means of exchange or digital process orcrediting to be digital currency, and also exclude a digital currency.[132]

In the case of cash paid in foreign currency or digitalcurrency, the value in Australian currency is worked out in accordance with themethods made by the Minster under the Rules.[133]The ExposureDraft Rules rely on the method determined by the Commissioner for thepurposes of the GST Act.[134]

The cash payment limit is $10,000; the limitis set under clause 8 of the Bill and any change to the limit will needto be made by way of an Act of Parliament.

Applicationof offences to an entity

The offences created by the Bill apply to the making oracceptance of ‘payments’ by an entity that exceed the cashpayment limit. According to the Explanatory Memorandum:

Payment is used in its broadest sense encompassing anytransfer of financial value. It is not limited to payments that are payments‘for’ something and includes gifts and loans. Examples of payments include theprovision of wages and a donation to a charity.[135]

Clause 7 of the Bill adopts the definition of theterm entity which is used in the Income TaxAssessment Act 1997; it is an expansive definition and includes anindividual, body corporate, body politic, partnership, unincorporatedassociation, trust, superannuation fund and approved deposit fund.[136]According to the Explanatory Memorandum these are ‘the structures through whichAustralians traditionally conduct business and which are subject to tax andother regulatory obligations’.[137]

Key issue—determiningcriminal liability of an entity

Clause 15 in Part 3 of the Bill imports theprovisions in Division 12 in Part 2.5 of the Criminal Code that are usedto determine criminal liability of corporate entities. It applies thoseprovisions to determine the criminal liability of entities that are not legalpersons, for example, partnerships.

Under section 12.2 of the Criminal Code as modifiedby subclause 15(1), a physical element of the offence will be attributedto an entity that is not a legal person if it is committed by an employee,agent or officer of the entity who is acting within the actual or apparentscope of their employment or authority. Subclause 15(2) sets out when aperson will be deemed to be an employee, agent or officer of the entity and actingwithin the actual or apparent scope of their employment or authority.

The fault elements of intention, knowledge or recklessness(but not negligence) will be attributed to an entity that is not a legal personif the entity has expressly, tacitly or impliedly authorised or permitted thecommission of the offence.[138]

Key issue—imposingcriminal liability on an entity

Clause 16 in Part 3 of the Bill imposescriminal liability on certain persons who are in control of entities that arenot legal persons—as stated in the Guide toFraming Commonwealth Offences ‘vicarious, collective or deemedliability is when one person is made liable for the wrongful act of another onthe basis of the legal relationship between them’.[139]According to the Guide to Framing Commonwealth Offences:

A business structure not set up as a corporation, such as apartnership or trust, is not criminally responsible for the acts or omissionsof one of its members because it is not a separate legal entity. In apartnership, the partners themselves are often individually or collectivelyresponsible for acts or omissions connected with the business, for example, forupholding contractual obligations made with other businesses. However, holdingall partners or members of non-corporate business associations collectivelyresponsible for the criminal conduct of one individual member should generallybe avoided because it is inconsistent with the principle that individualsshould not be criminally responsible for the conduct of others (guilt byassociation).[140]

Subclause 16(1) imposes criminal liability foroffences committed by the following entities in accordance with table 2:imposition of vicarious criminal liability. A defence is available for thosepersons taken to have committed an offence because of subclause 16(1) ifthey:

• did not aid, abet, counsel or procure the relevant act or omission and
• were not in any way knowingly concerned in, or party to, the relevant act or omission (whether directly or indirectly and whether by any act or omission).[141]

Table 2:imposition of vicarious criminal liability

Source: ExplanatoryMemorandum, Currency (Restrictions on the Use of Cash) Bill 2019, p. 16; subclause16(1).

Difference betweenthe offences

Clause 12: applicationof strict liability

Strict liability applies to certain physical elements ofthe offences under subclauses 12(1) and (3), such as the paymentmethod and the value of the cash.[142]Strict liability removes a fault element that would otherwise attach to aphysical element of an offence—this means that the prosecution only needs toshow the physical element was engaged in, or existed.[143]In this case, it will be sufficient for the prosecution to establish:

• that the payment is or includes an amount cash and
• the value of the cash equals or exceeds the cash payment limit.

However, a person will not be liable for a strictliability offence where they can establish an honest mistake of fact.[144]The onus is on the entity to establish that it mistakenly but reasonablybelieved that a payment did not include an amount of cash that was equal to orexceeded the cash payment limit.[145]As stated in the Explanatory Memorandum, the use of strict liability ‘places aduty on entities to ensure they design systems to ensure they do not make oraccept such a payment, which is necessary for the ban to be effective’.[146]

Keyissue—limit on strict liability

While strict liability applies to both the payment methodand value of the cash, it does not apply to the making or acceptance ofthe payment.

In this case, the entity must have intended to make oraccept the payment or series of payments, and in the case of the offence under subclause12(3), the entity must also have intended that the payment is part of aseries of payments for a supply or made as a gift.[147]

Stakeholdercomments

Several stakeholders expressed their concern with theapplication of strict liability to the offences.[148]For example, the LCA contrasts the proposed offences with the current reportingrequirements under the AML/CTF regime and submits:

This ban exposes front line staff of retail and wholesalebusiness operations, potentially including large numbers of low paid andunskilled employees, to criminal consequences for conduct within the scope oftheir employment and which they may have no control over, without regard to theML/TF [money laundering/terrorism financing] risk and other circ*mstances ofthe transaction underlying the offence, or the individual’s role in it.[149]

The LCA further submits that the Bill should includedefences for employees acting in accordance with their training and direction.[150]

Clause 13:intention, knowledge or recklessness

Subclauses 13(1) and (2) provide foroffences in the same terms as those under clause 12 of the Bill, exceptthat strict liability does not apply. In this case, the fault element thatapplies to the payment method and value of the cash is recklessness.[151] If recklessnessis the fault element for a physical element of an offence, proof of intention,knowledge or recklessness will satisfy that fault element:

This means that an entity will only commit these offences if,in addition to satisfying the requirements for the strict liability offences,the entity knew that there was at least a real risk that the payment wouldresult in the total amount of cash paid or received equalling or exceeding thecash payment limit.[152]

Conductengaged in outside of Australia

Subclauses 12(6) and 13(4) extend the scopeof the offences to conduct engaged in by Australian citizens, residents orcorporations outside of Australia if the payment or series of payments is for asupply and it occurs wholly or partly in Australia.[153]However, a defence is available to Australian residents if the conduct whichconstitutes the offence is not an offence in the foreign jurisdiction where theconduct occurs.[154]According to the Explanatory Memorandum to the Bill extended geographicaljurisdiction:

... ensures that entities that are closely linked to Australiacannot escape the application of the cash payment limit in relation to suppliesoccurring in Australia by arranging for payment to take place outside ofAustralia.[155]

Stakeholdercomments

The LCA considers that the application of extendedgeographical jurisdiction ‘imposes a substantial burden of awareness on allAustralian citizens and residents shopping online using digital currency, orusing cash while overseas’.[156]To this end, the LCA submits that the regulatory issue that this aspect of theBill seeks to address is not justified by the risk and unintended consequencesthis may have on Australian citizens and residents.[157]

Penaltiesfor contravention

Contravention of subclause 12(1) or (2) mayresult in a maximum penalty of 60 penalty units—currently $12,600.[158]A court may impose a maximum penalty on a corporation that is up to five timesthe amount that can be imposed on a natural person—that is 300 penalty units,currently $63,000.

The maximum penalty for contravention of the offences in subclause13(1) and (2) is 120 penalty units, currently, $25,200 and/or twoyears imprisonment.[159]A court may impose a maximum penalty on a corporation that is up to five timesthe amount that can be imposed on a natural person. The Explanatory Memorandumprovides the following justification for the higher penalties under clause13:

This higher penalty reflects the greater level of culpabilityinvolved in deliberately or recklessly breaching the cash payment limit. Unlikethe strict liability offences, which operate to ensure compliance with thelimit, the recklessness offences apply to penalise entities that have consciously and deliberately decided torisk violating the cash payment limit.[160]

Exceptionsto the offences

Subclauses 12(5) and 13(3) provide that theoffences do not apply to:

• the making or acceptance of a payment of a kind specified by the rules or
• the making or acceptance of a payment in circ*mstances specified by the rules.

The Minister is granted the power to make rules by way oflegislative instrument under clause 20 of the Bill.

The ExposureDraft Rules propose that there are certain kinds of payments and circ*mstancesin which the offences will not apply, including:

• payments relating to personal or private transactions
• gifts–excluding those made to charities
• payments made or accepted in circ*mstances where the AML/CTF Act requires a TTR to be submitted or where the FTR Act imposes a reporting obligation
• payments made or accepted by a public official in the performance of their duties
• payments involving cash in transit providers and
• payments made in digital currency and
• payments where no non-cash method is reasonably available.[161]

As discussed above, the Scrutiny of Bills Committee did notconsider that the Minister adequately justified the need for the exceptions tobe determined by delegated legislation.[162]

Of particular concern is the very wide application of theBill to all physical and digital currency transactions exceeding $10,000 in theabsence of proposed exceptions. Although any future amendments to the Ruleswill be disallowable by Parliament in accordance with the LegislationAct2003,they may ultimately be narrowed or widened at the discretion of the Minister.

Key issue: paymentsrelating to personal or private transactions and gifts

There are broadly three circ*mstances where it is proposedthat the offence provisions of the Bill will not apply under the exceptionproposed in section 7 of the Exposure Draft Rules, namely:

• a payment made for a supply, acquisition or as a gift which is not made in the course of carrying on an enterprise—both parties exempt
• where the entity making the payment or gift reasonably believes that the payment is not made in the course of carrying on an enterprise—party making the payment exempt or
• where the entity accepting the payment or gift reasonably believes that the payment is not made in the course of carrying on enterprise—party accepting the payment exempt.[163]

While the first exception is purely a question of fact,the Draft Explanatory Statement states that in relation to the remainingexceptions, ‘whether a belief is reasonable will depend on the circ*mstances ofthe transaction and the parties’. The Draft Explanatory Statement provides thefollowing example, in which an entity could be regarded as having a ‘reasonablebelief’ as a result of undertaking ‘reasonable enquiries’:

... if an individual sells their car to another individualreasonably believing the other individual has acquired the car for private useafter undertaking reasonable inquiries such as searching theAustralian Business Register, then the exception applies, even if thisbelief is incorrect as the other individual had in fact acquired the car foruse in a business they are carrying on.[164][emphasis added]

While the use of ‘carrying on an enterprise’ may beappropriate for the purposes of determining an entity’s taxation obligations,it does appear somewhat ill-suited for the purposes of establishing a defenceto a criminal offence—as can been seen from Australian Taxation Office (ATO) guidance,the term ‘enterprise’ is expansive, but not without its own ambiguities.[165]

Gifts made to or from a charity will not be exempt as thecharity is considered to be carrying on an enterprise.[166]

The proposed exception will not apply in the case of apayment for the acquisition of real property irrespective of whether it is aprivate transaction.

Key issue:payments where the AML/CTF Act or FTR apply

It is also proposed that certain cash transactions thatare made or accepted in circ*mstances in which an AML/CTF Act or FTRAct entity is required to provide a TTR will also be excluded from theoffences in clauses 12 and 13 of the Bill. [167]Further information on reporting obligations to AUSTRAC is discussed aboveunder the heading ‘Role of AUSTRAC’.

The justification for the exclusion is that suchinformation will already result in an electronic record if the reportingentities are currently complying with their obligations.[168]

Consistent with this purpose, the proposed exceptionapplying to AML/CTF exceptions does not apply where:

• the AML/CTF reporting entity is required to be enrolled as a reporting entity, but is not so enrolled and
• if the entity making or accepting the payment is not the reporting entity, that entity either knew, reasonably suspected or ought to have known that the AML/CTF reporting entity was not enrolled.[169]

Similarly, the proposed exception applying to FTR Actreporting entitles does not apply where:

• the entity is not an FTR Act reporting entity and
• the entity making or accepting the payment either knew, reasonably suspected or ought to have known that the transaction was not going to be reported under the FTR Act.[170]

Key issue: paymentsmade in digital currency

A payment which is or includes an amount of digitalcurrency is proposed to be excluded under the Rules.[171]The Explanatory Memorandum justifies the proposed exclusion of all digitalcurrency under the Rules on the basis that it is not currently being used inAustralia in such a way that ‘it presents a material risk of facilitating thesame sorts of avoidance of obligations currently facilitated by physicalcurrency’.[172]Similarly, the Draft Explanatory Statement states: ‘there is little currentevidence that digital currency is presently being used in Australia tofacilitate black economy activities’.[173]

Notwithstanding this policy position, the ExplanatoryMemorandum also states ‘crypto-currencies and other digital currencies aregenerally unregulated and often do not create clear records of transactions ina form that can easily be used to identify the parties to a transaction’.[174]This is consistent with the Taskforce’s observations, for example ‘somenon-cash payment methods, including the many cryptocurrencies which are beingtraded, are just as anonymous as cash.’[175]

In its 2017 report OrganisedCrime in Australia, the Australian Criminal Intelligence Commission(ACIC) noted the increasing use of such technology to facilitate criminalbehaviour:

Virtual currencies are used by criminals for money launderingand in exchange for illicit goods. Alternative banking services that are basedonline are being exploited by serious and organised crime to launder illicitfunds, evade tax obligations and avoid regulatory oversight ... The two keyenabling technologies currently used to facilitate serious and organised crimeare virtual currencies and encryption. Virtual currencies, such as bitcoin, areincreasingly being used by serious and organised crime groups as they are aform of currency that can be sold anonymously online, without reliance on acentral bank or financial institution to facilitate transactions.[176][Citations omitted].

While there have been developments in this space sinceACIC’s report, for example the inclusion of digitalcurrency exchange providers within AUSTRAC’s remit,[177]it would at least appear that digital currency currently facilitates conductin the Australian economy, which the Bill, as expressed in its objects in clause3, seeks to address.[178]

Stakeholdercomments

Stakeholder concerns about this particular aspect of theBill are twofold. Some stakeholders consider that the exclusion of digitalcurrency through the use of a legislative instrument rather than through theBill has the potential to undermine investment in digital currencies, giventhat it may be more easily changed in future.[179]

Conversely, other stakeholders identify cryptocurrenciesas having similar attributes to cash and do not agree that they should beexcluded.[180]For example, the Uniting Church has drawn the Committee’s attention to the 2019guidance of the Financial Action Task Force (FATF), which states:

VAs [virtual assets] have certain characteristics that maymake them more susceptible to abuse by criminals, money launderers, terrorist financiers,and other illicit actors, including their global reach, capacity for rapidsettlement, ability to enable “individual user-to-individual user” transactions(sometimes referred to as “peer-to-peer”), and potential for increasedanonymity and obfuscation of transaction flows and counterparties.[181]

Commencement

The Bill as currently drafted is set to commence on 1January 2020. As this date has passed, an amendment to the commencementprovisions of the Bill is required, as Treasury has stated that the Bill willnot apply retrospectively: ‘[t]he government will consider the appropriate datefor the cash payment limit to commence together with any other issuesidentified in the Senate Committee’s report’.[182]

A number of stakeholders have submitted that the earliestcommencement date should be
1 January 2021 in order to allow them to put in place suitable business systems,train their staff and provide enough time for the government to run a publiccommunication campaign.[183]

Responsibleagency

Responsibility for the Bill does not fall within any oneparticular agency—it appears that multiple agencies will be incidentallyinvolved in investigating matters, for example, the ATO may uncover evidence ofan offence in the course of undertaking an audit. Ultimately, however, suchinformation would be provided to the Australian Federal Police (AFP) or CDPPand prosecuted by the CDPP. The following explanation was provided by Treasuryto the Committee:

In relation to who is responsible for the bill, Treasuryare responsible for the policy and we will also be doing the guidance,so that is different to other tax measures. Once a tax measure is passed,generally, responsibility for implementation will move on to the ATO—that is,both enforcement and guidance.

In this case, guidance will be done by us. Enforcement isprobably going to be an amalgam. There is no one agency responsible forthis. In relation to taking things to court, it's going to be the AFP andthe CDPP. It is a criminal offence, so the AFP will have responsibility.If they investigate something and find a use of cash, they can then investigatethat and prosecute. If the ATO find, in some of their audits, that there isa high chance that someone was using cash above $10,000, they can then passthat information on to either the AFP or, if they believe there's enoughevidence for prosecution, to the CDPP. That would be the same for somethinglike the Fair Work Ombudsman and ASIC as well. It's deliberately open, andthat is because the black economy, as I said at the start, is awhole-of-government issue; it's not just a tax issue. It can show itself in in numerousways.[184][emphasis added]