Draft rules supporting the new currency restriction legislation have been released by Treasury. The legislation bans the use of cash for some transactions of more than $10,000, and has been passed by the House of Representatives.

The Currency (Restrictions on the Use of Cash) Rules 2019 specifies, among other things, the transactions that will generally not be subject to the about-to-be-legislated currency restrictions.

Broadly, the payments not subject to the cash payment limit are:

• payments related to personal or private transactions (other than transactions involving real property)
• payments that must be reported by an entity under anti-money laundering and counter-terrorism legislation, provided, broadly, the entity with a reporting obligation complies (or is reasonably expected to comply) with their obligations under that legislation
• payments made or accepted by a public official in the course of their duties where it is necessary for the payment to be made in cash for the performance of those duties and payments made or accepted by Australian government agencies where the payment is foreign currency produced for a foreign government
• payments that only equal or exceed the cash payment limit because the payment is part of a transaction involving collecting, holding or delivering cash and this is undertaken in the course of an enterprise of collecting or delivering cash (that is, providing cash-in-transit services)
• payments that only equal or exceed the cash payment limit because payment is or includes an amount of digital currency
• payments that occur in exceptional situations where no alternative method of payment could reasonably be used.

Foreign and digital currency must be valued in the same manner as they are for GST, and using the methods prescribed in relevant GST administrative determinations.

The paper also contains a factsheet, created to dispel some of the “myths” Treasury says has arisen in the course of finalising the legislation. It states that:

• cash can be used to pay for a transaction up to the limit
• the cash limit does not affect cash gifts to family members
• the cash limit does not affect the sale of second-hand goods between private individuals
• you will still be able to store $10,000 or more cash outside of a bank
• you will still be able to deposit and withdraw $10,000 or more cash into and from your accounts
• any changes to the bill are subject to full Parliamentary scrutiny.

Is cash disappearing anyway?
The legislative development comes at a time when it seems that the use of cash by ordinary taxpayers is on the decline over recent years. A Reserve Bank of Australia report from 2016 found that only around 37% of Australians made payments in cash — which halved the RBA’s finding of 70% cash payments made in 2007.

And this is a trend that seems to be continuing. Research undertaken in September 2019 by comparison site Finder found that 23% of Australians don’t carry any cash at all, with another 21% carrying between $1 and $10.

The average amount in someone’s wallet or purse was $59.40, but this varied according to someone’s age and gender. Men carried more (average $74) than women ($44.90). By age, the research showed that people under age 24 had an average of $37 in their pocket, age 24 to 38, $68; 39 to 58, $56; and older, $70.