Currency (Restrictions on the Use of Cash) Bill 2019 | Hacker News Reader

Currency (Restrictions on the Use of Cash) Bill 2019

treasury.gov.au

155 pointsdarcys22205 comments

I wonder if we are going to reach a sort of singularity with regard to encroachment on privacy in western countries where we both take it for granted that privacy is a right, and live in societies where actual privacy is clearly trending somewhere just above zero.

I don't think this is really about cryptocurrency particularly. This is about electronic transfers generally. My read on this was that the government is basically saying "big transactions can't be in something we can't feasibly track."

Australia seems quite aggressive in this regard; also openly banning encryption.

I used to be up in arms about this stuff. Now I am older and mostly trust (for my threat model) off-the-shelf end to end encryption for basically anything I consider private.

But I also don't care about the privacy thing anymore. I kind of hope the people 10+ years younger than me still care about that stuff. Google reading/mining the dick jokes I've been sharing back and forth in a dying g-chat window for the last 10 years? Whatever. I'd still keep the conversation there just for intertia's sake; even though I also assume its adding to google's model about me.

I don't think, at least in countries culturally similar to the US (the one I know the most), any populous will embrace the idea of "let the experts of the government see everything so you can all be safe"; but, it also seems that we will just trend toward that and kinda pretend like its not happening.

Our society needs you to still care. It's this exact attitude that has ceded so much control to the government where there is little oversight.

It's not fair to put the burden on young people, and apathy is no excuse.

> Australia seems quite aggressive in this regard; also openly banning encryption.

Australian here, talking to you over an encrypted HTTP connection, because we didn't ban encryption. Mandating certain measures which sometimes can be used to circumvent the privacy guarantees of encryption doesn't mean encryption is banned... (yeah, it's still a bad law.)

As for transaction privacy - I am concerned about small transactions, not large ones. Small transactions reveal your personal preferences and day-to-day dealings, large transactions reveal aspects of your financial situation that almost certainly have an impact on your tax obligations (and therefore that government has more reason to want to track) without revealing as much about your personal affairs.

So this bill, on its own, seems alright to me. Though I do fear that it's the start of a slippery slope down to abolishing cash - not that the free market needs any help with doing that. We'll see.

> Mandating certain measures which sometimes can be used to circumvent the privacy guarantees of encryption doesn't mean encryption is banned.

If there's a way around encryption for someone, then there's a way around encryption for everyone (because it will get out)

If there's a way around the encryption, then it's not really encrypted.

If the Australian government has mandated that there must be a known way to circumvent encryption, then yes, they have effectively banned encryption.

> culturally similar

This is the crux of it. The purpose of the repressive Australian laws is to ensure that Australia's culture remains on course per those who are planning it.

Find yourself in a non-mainstream culture that wants to discuss your problems with the mainstream culture privately? Well, you can't do that without incurring the wrath of the PTB.

Is this a healthy state of affairs? I don't think so. But Australia has not been a healthy place for a long, long time.

My issue with removing cash is that in a way you are moving from public money (printed by the government) which you are free to use as you want to a private money issued by banks who generally have lots of ability to charge you money for payments and block your account.

Banks in Canada have been fighting for removal of cash and cheques (which are regulated in terms of fees).

Per the article, it's a $10k AU limit. That's... not really removing cash. It looks more like a money laundering statute to me.

Okay, so what number differentiates between a money laundering statute and removing cash for you? Is there a minimum number for you where it is okay to force people to pay bank fees and give up their privacy?

> In the United States, the Bank Secrecy Act requires currency transaction reports (CTRs) to be filed for transactions valued at more than $10,000;

from: https://en.wikipedia.org/wiki/Structuring

So it seems to be pretty settled law that $10,000 USD is a reasonable starting point.

Beat me to it. Yeah, this is nothing new. Obviously the US regulation is about reporting and not payment mechanism as in AU, but the justification and thresholding for the for the laws are very comparable.

American libertarians are fine living with a $10k limit, Aussie ones will be too.

> American libertarians are fine living with a $10k limit, Aussie ones will be too.

Are they? I'm not even a libertarian and I'm not pleased with the $10k limit.

Out of genuine curiosity, on which $10k+ transactions is the government reporting requirement (which strictly is of your bank and not you) a hardship or privacy concern of yours?

I mean, people make embarassing transactions all the time, and it virtually never leaks. Even Trump's Daniels payoff (as juicy a story as you could possibly imagine) didn't show up as a leak from a bank or the government. In practice, this just hasn't been the privacy concern everyone thinks it is.

You lack privacy from the bank.

Knowledge is power. The more knowledge a government has about individuals, the more power it has over them.

I believe that the right to privacy is a prerequisite to protecting many of the other rights guaranteed by the bill of rights, and indeed to protecting many unalienable human rights.

This is not hypothetical. The US government seizes or freezes people's assets all the time through civil forfeiture[1], injunction[2], or prejudgment writ of attachment[3]. In other countries, asset freezing[4] can have even more severe scope. Not only can these tools be used to violate someone's right to freedom from unwarranted search and seizure (4th Amendment), but it can have implications for their right to due process and counsel (5th and 6th Amendment), as it impacts their ability to pay for their defense. And in a direct way, it may be construed as a violation of the right to freedom from excessive bail (8th Amendment) as it acts as a form of bail. Broadly interpreted, religion, speech and press (1st Amendment) and arms (2nd Amendment) all cost money, so seizing assets can affect these as well, and seizing assets can be used as an intimidation tactic to prevent free exercise of these rights.

Privacy with regards to personal finances is a fundamental protection against improper seizure of assets. The government can't seize assets they don't know you have.

[1] https://priceonomics.com/how-police-officers-seize-cash-from...

[2] https://en.wikipedia.org/wiki/Injunction

[3] https://en.wikipedia.org/wiki/Prejudgment_writ_of_attachment

[4] https://en.wikipedia.org/wiki/Asset_freezing

So you're arguing that it's okay to force people to pay bank fees and give up their privacy if the US has been doing it for a while?

> it's okay to force people to pay bank fees

If it forces you to pay bank fees than that's the issue that needs to be fixed. I agree though that until this is fixed, that bill is wrong.

> give up their privacy

I have personally no trouble over anyone privacy for payment over 10 000$. There's not much either that is given (amount and people implicated) and is given to a specific small subset of persons that you should already trust (your bank and the government).

Why should we trust our bank and Government? Given that they nature and compositions of banks and Governments change often, and historically have had periods of complete untrustworthiness, why shouldn't it be assumed that you should not implicitly trust your bank or Government? Especially in Australia - see Royal Banking Commission, illegal metadata retention accesses (and accompanying laws).

This is not a limit on transactions, it is threshold beyond which additional bookkeeping needs to be done. Five-dollar deposit: only bookkeeping as is needed to satisfy the bank and yourself that the $5 will be available to yourself in the future. Five million dollar deposit: extra bookkeeping, and if it's in stacks of twenties, warn the branch manager a few days in advance due to the physical requirements for handling all those twenties.

If the new AU bill would say, "Don't deposit 5 million AUD in physical cash" then that's a problem. If it would say, "Don't deposit 20 AUD in physical cash then that's an absurd problem (IMHO).

In the USA the bank branch manager has to achieve some level of non-surprise that the transaction is taking place (Know your customer) but it seems like that wouldn't necessarily block a transaction.

I know people whose cautious banking habits are still influenced by the banking problems of the 1930's. I think this constrains the politically possible banking changes in the USA, maybe. Does such caution have any impact in Australia?

I am not a poor man. I use cash regularly. I have never in my life even seen $10,000 in cash, let alone had it in my possession, still less tried to use it in one place. That's anecdote, not data, but it suggests that $10,000 is indeed in the "money laundering" territory.

You may have seen ten thousand dollars in cash and not even realized it. If you stack $100 bills, it's less than half an inch before you hit ten thousand dollars. It's pretty unobtrusive.

Addition: if you've ever seen them get a new stack of $100 bills at a bank, with the yellow band, you've seen a $10 k strap.

It may be common but it happens. My anecdata differs. I consider myself a working poor and I saw and handled 20k in cash. Granted, death in family and stuff but labelling it money laindering territory is a little much.

I was handling more cash than that as a teenager. I worked in retail and it was pretty common that the morning deposit would be more than that.

Also, if you ever make secondhand equipment purchases from a private seller (not a used-whatever dealer) you get comfortable with large amounts of cash.

Hell, I had that much money stack up in my sock drawer after a months of collecting rent from my roomates.

Just because it's unusual to you doesn't mean you have any perspective to comment on if the law should view it with suspicion.

They're just dipping a toe in the water with a $10k limit. It will necessarily drop as time goes on. Getting the ceiling in place is the hard part. Ratcheting down the cap is easy.

As can often be seen on this very site, a common excuse for increasing government intrusion is "Why shouldn't we do X? We already do Y..."

It doesn't need to drop, inflation will rise to meet it.

At least the Swedish central bank is starting to develop “e-krona”, i.e. giving residents checking accounts for central bank money without private bank intermediaries.

How do they deal with inflation/investment to counteract said inflationary depreciation?

I don’t know but their draft spec for the procurement mentioned interest rates especially mentioning the need for negative interest...

Who is lobbying for this? Who wants this legislation to pass, and why? (American here, not sure how things work in Australia, but these are questions I often ask in my own country)

That's a very good question.

> The Black Economy Taskforce recommended this action to tackle tax evasion and other criminal activities.

Guessing someone flagged the parent comment thinking there was a racial connotation, so vouching it back from the dead.

https://treasury.gov.au/review/black-economy-taskforce/

Banks, credit cards and payment processors and off course NSA and friends.

I think the government, holds to benefit from this, and there might be no need of lobbying. Any transaction in cash for such a high amount, is intentionally done to keep the transaction off-book (and avoid taxes). There is little reason, why one would go through the inconvenience of managing so much cash, when a digital transaction is so much more ergonomical.

India too is aggressively trying to achieve this. One of their rather bold attempts, called demonetization, happened a few years back, but it failed. However, in principle, I agree with the idea of having a cashless economy, so that government has data to see who is lying in their tax returns.

> However, in principle, I agree with the idea of having a cashless economy, so that government has data to see who is lying in their tax returns.

This is really bad, because it prevents any kind of privacy. Want to buy a huge dildo from HugeDildos Inc.? Now you can just pay with cash. With cashless economies, you will now have their company name on your bank statements.

And this is just a stupid example. What do you do in a case where you have legalized Marijuana at a state level and illegal at federal level (like in us). You can sell it in your state, but you cannot get a bank account.

And what happens if there's a blackout? How do you buy food?

I'm not a fan of the bill, but it is only restricting payments over $10 000. You can still buy dildos with cash, unless it's gem-encrusted or something like that.

That's just the first step.

They lowered the limit to 420eur for independent contractors and companies here in Slovenia. They wanted to lower it to 50eur, but luckily failed.

In Spain you cannot pay anything over 1000€ in cash.

The discourse is well known, and in HN terms is like this: "why would I want PGP or SSL? Only if you want to do bad things you need that level of privacy". So "Why would anybody want to pay cash if he is doing everything within the law?"

That's almost certainly how it starts, but they will inevitably try to restrict it more if this succeeds.

First they came for the big purchases, and I did not speak out because I was not a big spender.

Then they came for the food/clothing purchases, and I did not speak out because I had my credit/debit card.

Then they came for huge dildos, and there was no one left to speak for me.

> called demonetization, happened a few years back, but it failed.

It failed because it was designed to fail from the start, the govt introduced higher denomination notes (2000 Rs) which is a boon for money laundering.

Just noticed the 10k ceiling. That would make sense. For whatever reason I thought the proposed law was more restrictive than it actually was. I guess the late hour here is taking its toll.

> I agree with the idea of having a cashless economy

Just remember that a cashless economy is one where you must secure permission from a person you can’t see and have never met every time you wish to acquire food, shelter, or clothing

That's just a normal environment that most middle class people who use debit/credit cards are already used to.

> That's just a normal environment that most middle class people who use debit/credit cards are already used to.

No it is _not_ the normal environment. He said "you must secure permission" from a third party. This is not true for those who use debit/credit cards because they also have the choice to use cash as well.

A side note: cash and cashless work great with one another. If your card stops working some reason, you are still able to use cash. If you don't want to carry cash one day, you can use a card. I find it very frustrating that they are constantly pitted against each other when they are in no way incompatible.

Not much choice if your employer transfers your wages to your bank account anyway. To get hold of the money, you need to use a debit card, a check, or the service of a bank teller. In all cased, a third party, or several, is involved.

It's a bit like in ancient Sparta, where the currency was mandated to be iron, so that large cash transactions would become cumbersome, and would be very visible.

>Not much choice if your employer transfers your wages to your bank account anyway.

I don't think gp was talking about not requiring permission ever. He was talking about not requiring permission on a per transaction basis.

Those middle class people are privileged, for now: The third party doesn't stop them getting their food and shelter.

The unbanked, on the other hand, will be at greater risk of starvation when you need a bank account to obtain food.

Everyone can get a basic bank account, you say?

Well, it's the law in the UK already that some people are not allowed a bank account (you need to prove your right to a bank account in the UK, along with your right to rent shelter).

They are still people, and they will still starve in a cashless economy.

I know this, because I already know people who are getting by on half a meal a day, and that's today.

Obviously laws will have to be changed to support a cashless economy. You're attacking a strawman by assuming that a cashless economy must exclude people because of contradictory laws like the UK one you mentioned.

I don't think it's a strawman, because I think laws like the UK one come from a motivation or principle which is not going away. That is: to make laws that sound appealing to enough of the population, which make life ruinously and cruelly as harsh as possible for a minority.

The principle being "if we make life unbearable they will somehow find a way to leave, we don't care how as it's not our problem, and we don't care if it's so unbearable that the quality of life is significantly worse than the minimum our human rights principles theoretically guarantee".

Essentially, they are already supposed to survive on magic or starve and die, even though no minister would admit that. (And some of them _are_ dying.)

It seems clear that the government which instituted those laws does not seriously consider the wellbeing of that minority, as if they aren't people at all. Political statements like "making a country for the good of all" are meant to gloss over the fact that said minority is not part of the "all".

I think it's this principle which is in play on an ongoing basis, not the laws of the day.

So in a cashless economy, I think the principle of "as harsh as possible and we don't care about their wellbeing or basic human rights" will continue, and due to system side effects (rather than intentionally), the consequences will become progressively more severe for a minority.

For people to not be excluded in a near-future cashless economy, the driving principle would have to actively change, to make sure everyone has some access to the cashless economy, and at the moment, I see no sign that popular governments would implement something like that.

I don't understand how people could morally support a push towards cashless without at least those laws being change _first_.

> Any transaction in cash for such a high amount, is intentionally done to keep the transaction off-book (and avoid taxes)

What if you wanted to buy a $25,000 car in cash from a dealership? That's not intentionally avoiding taxes. It's trying to get a better deal.

It's not unreasonable to want to avoid keeping a lot of money in a checking account in the US. They offer 0% interest rates. It doesn't make sense to have large sums of money sitting there. Why let the bank profit off your money if they aren't going to return some of it back to you for letting them use your money to make them more money.

Why would the dealership offer a better deal for cash payment than for s check/bank transfer, unless they want to underreport the sale price and the taxes owed?

Not paying a middleman a percentage of the transaction would have some value to it.

A check would likely be the same deal as cash. But there's no incentive to keep that amount of money sitting around in a checking account.

I don't think a dealership would try to under report the transaction for tax evasion purposes. There's too much risk. The customer will get a receipt for the real amount they paid, and it's also very possible the customer will report the transaction on their taxes as a business write off.

> I don't think a dealership would try to under report the transaction for tax evasion purposes.

Ah yes, the famed honor and integrity that the car dealership profession is known for.

> customer will report the transaction on their taxes as a business write off

Businesses don't do this. Unless they're money laundering fronts, businesses don't buy stuff in actual physical cash unless they have to, and they know that any cash discount would be from under-reporting the sales tax and that recording the transaction would be bad for both sides.

I take it you haven't done any home remodeling work lately? Businesses like plumbers _love_ cash, in the sort of amounts under discussion. Thinking it doesn't happen is just bizarre.

That's not paying the business, that's paying the person - it's exactly the same thing one step back. That cash won't appear in their business accounts. The whole purpose of paying them cash is to enable their tax evasion.

Simply false. In every case of my personal knowledge, and there are very many, it has been to protect the right to privacy, and no taxes have been evaded. I find use of cash in all amounts to be increasing as surveillance increases.

> Businesses don't do this. Unless they're money laundering fronts, businesses don't buy stuff in actual physical cash unless they have to, and they know that any cash discount would be from under-reporting the sales tax and that recording the transaction would be bad for both sides.

There's nothing wrong with buying computer parts with cash for your business and then writing it off. I do it whenever I'm in a pinch and want something "right now" instead of ordering it online and waiting for shipping. A store will give you a receipt.

I choose to use cash whenever possible to purchase small and large things because I don't like the idea of banks and other payment providers profiting from me without sharing those profits.

Unfortunately my business involves accepting money digitally, but I say it's unfortunate not because I'm trying to cheat any systems. It's because I'm forced to allow banks and other entities to harvest my private financial data and leverage my money for profit, and the alternative of not doing that is worse (ie., I personally accept it instead of being unemployed and homeless).

> Businesses don't do this.

My old bar owner had no option but to pay the liquor distributor in cash (for various reasons) with both parties having no intention to engage in tax evasion.

Well, maybe the bar owner was but I believe liquor receivables were how the tax man determined if he was under reporting income so his books had to align with the distributor.

> What if you wanted to buy a $25,000 car in cash from a dealership?

I think you’ve not done this in the past twenty years, or just heard the phrase and misunderstood it.

“Paying cash” at a dealership for a new car doesn’t mean literally bringing in paper currency. Generally you pay via cashiers check or wire transfer (rarely via personal check, but with a waiting period most of the time then). Saying “paying cash” at a dealership means “not financing the vehicle.”

I’m not saying it’s not possible to use paper currency, I’ve done it myself. For anything of value though, you’ll generally get a less enthused recipient (as they’ll have hassles depositing it), not to mention the hassle you’ll get just to withdraw the money. As an example in the US, withdrawing over $10k in cash requires filling out paperwork. Withdrawing much larger amounts will generally involve even more scrutiny. Trying to break up the withdrawals to stay under $10k will very likely set off red flags with the bank and lead to inquiries from their compliance department at best (usually much worse).

The beauty of cash is that everyone knows "it's good" (ignoring counterfeiting for the moment). There's no "stop payment" on cash.

If I'm buying a car from a dealership, ACH/e-check or regular check is fine. If I'm buying a classic car or a boat from a private seller on a weekend, cash is still king. A dealership may prefer a check over cash, but a private seller who is on the fence about taking your semi-lowball offer is often somewhat motivated by seeing physical cash and imagining (even if subconsciously) having the cash and being done with the transaction.

Physical cash's non-recourse is a security problem for theft, of course.

Try going and depositing $50k in cash at a US bank (let alone orders of magnitude more) and tell me it was a pleasurable experience. As someone who’s withdrawn and deposited multiple large amounts of cash (largest being in 7 figures range), I can say it’s a real pain.

There's no waiting period if you pay by check. (Yes, real world personal experience.) Don't forget they're happy to let it go with just a promise to pay later.

I’ve paid by personal check before too without a waiting period, but I also have first hand knowledge that it’s not the norm, at some dealerships anyway. Obviously every place will likely be somewhat different.

> What if you wanted to buy a $25,000 car in cash from a dealership? That's not intentionally avoiding taxes. It's trying to get a better deal.

Eh? The normal way you get a better deal by paying upfront is by avoiding the financing costs or convincing them that you're closing the deal immediately - although sometimes the financing makes the dealership money at the expense of the manufacturer, so it could go either way.

All other possible ways of getting a discount for cash involve either tax evasion or fraud (e.g. salesperson gives you 5% off, writes down 10% off in the records and pockets the remaining money).

> It's not unreasonable to want to avoid keeping a lot of money in a checking account in the US.

The bank is insured, while you're not, and at risk of being held up at gunpoint by robbers or the police. Keeping a large amount of physical cash lying around incurs security costs and risks.

> What if you wanted to buy a $25,000 car in cash from a dealership?

A Dealership in America is never going to say No to an actual buyer, but they'll encourage you to finance (that's where they make their profit) or bring a check (large amounts of physical currency and filing Suspicious Transaction Reports are annoying).

Only private sellers want actual cash because our financial system exposes the recipients of any other form of payment to too much fraud risk.

I sometimes do medium to large transactions in cash so I don't have to pay things like credit card fees. $600 set of tires? Why should visa get $18 (3%)? I don't mind stopping by the ATM to save that.

Also, maybe I just don't want everyone knowing everywhere I spend my money. I tried to get a mortgage a bit over a year ago and they wanted to see statements from all my accounts for the last 6 months. It's none of their damn business if I spend 500 a month on champagne or 500 on church donations.

Them looking at your accounts is more about income than expenses. They want to see how much money you're making and that it is recurring. They don't want to give you a loan based on you having $x and then find out the only reason you have that is because your friend gave you a loan for it. That would make you less likely to pay the mortgage back because you have other liabilities. So if you have a cash deposit they will want an explanation.

In your perfectly dispassionate banking office this is true, but in reality, people will judge, even subconsciously (though the subconscious bit is giving too much credit).

To give a true, recent, example, I might not like having the loan officer know about my donations to the Green Party - they could be right wing, after all!

Also, some places are just small and people gossip.

For the last tax filing that needed a voucher for income, I blacked out pretty much everything except the amounts received / sent. Is this not allowed in such a case for you in the US?

Tax statements are sufficient for proving income. Banks also need verification of the origin of funds for the down payment and closing costs, which is where the other statements come in.

I don't know. I don't live in the US anymore.

You may be able to open two accounts, at two banks. Put your reliable income into one, and transfer it monthly to the other, which you use for irregular personal spending. Give the loan company the statements for the first account.

It's a requirement to do so for ALL your accounts. Same for naturalisation applications, which I'm also doing.

Last time I applied for a loan, they followed up asking for bank statements for the account I had given on the application form to receive the funds.

I agree with you, and that doesn't seem right, but it is what the request asked for.

Cash is freedom and privacy. Cashless is tyranny and scrutiny.

This is why we say innocent until proven guilty in the West. There is a social contract that is is better to let a murderer go free than to let an innocent person rot in prison for a crime they didn't commit.

The same social contract exists in society for cash. Cash exists so that we have privacy and freedom at the cost of criminal activity.

Cashless can also be anonymous, but that won't be presented as an option of course.

You are so right about the innocent until proven guilty.

The inevitable consequence is absolute despotism. Without privacy, there can be no freedom.

I don't think that is a worthwhile price to pay in order to preserve an obsolete system of government funding. Especially since it won't work anyhow.

Australias law enforcement community have a strong influence on Australian culture, and it is they who are lobbying for more restrictions on Australians' free speech, censorship, and use of cryptography. There isn't really any legislation which protects free speech in Australia, like there are in many other western nations - there is instead an 'implied right' granted to Australian citizens by the sovereign, but this is mostly an untested grey area at the moment - and Australians in general don't care about their basic human rights as long as there are avocados to smash.

Some Australians care but all of these horrific laws are getting passed with bipartisan support.

Yes, its a terrible state of affairs when the people of a nation as resourceful as Australia, are not ruled by individuals who represent the will of the people.

Then again, the will of the people - alas, easily modified at scale in Australia - is not something we can always depend on to do the right thing. Australia has many, many examples of the collective will of the populace resulting in heinous conditions ...

You have to realize that these are just steps towards the end goal of a cash-less society.

The financial sector wants to profit from every transaction. Big tech wants to track every transaction. Central banks want negative interest rates. Authoritarian regimes want more control.

+1 - in particular, it's notable that the proposed legislation doesn't include an inflation adjustment, i.e. in real terms, the maximum cash transaction will decrease over time until cash becomes impractical, even across multiple transactions.

It's the ultimate crony partnership: all people within the borders are required to use the services of our government-appointed cartel (the banks), or else we'll fine you and jail you. Because obviously, if you care about privacy, you must be a terrorist ... or something.

These experiments are the terminal phase of the fiat money disease.

There are also significant advantages to cashless. Greatly reduced incentive to pickpocket or mug people, for example, and it's harder to accidentally lose money.

If people truly understood the ramification of a completely cashless society, I think they would have no problem with some of the trade-offs.

If they cashless society used Monero, or a fungible version of Bitcoin, sure. Even then though, it still excludes people without digital means - which is immoral.

Sure, if it's anonymous cryptocoins.

But I don't want the government able to monitor every $2 purchase I make.

Please state what all the positive ramifications you are referring to are. All I see is essentially some extra convenience in exchange for a probable privacy nightmare.

But it is much easier to loose your money to hackers than it is to people muggers or burglars. Being a software developer by trade I have growing distrust to software in general and software handling my money in particular.

Using cash is an option, if you don’t want to — you don’t have to.

Somebody likes getting rid of options.

They can get to prison, where options are carefully limited.

Precisely this.

I think that's what we're all afraid of. But I interpreted epiphanitus as asking what specifically, precisely, is causing this legislation in Australia, right now? Who in big tech, the financial sector, etc, and how are they pushing for this?

On the other hand, the fact that it's just a cap on transactions over 10k AUS could mean it really is an anti money laundering statue and not a covert attempt at creating a cashless society.

Again, I am by no means an expert on Australian law, but I am curious about whether a law like this would be precedent-setting somehow. The role of precedence in the US legal system (and how interested parties influence legislation, for that matter) is well known and something that is browbeaten into every US civics student.

It also may be that the strength of the movement/opposition to cashless economies will hinge not on money laundering statutes but with the success or failure of libra.

Alice the Accountant and Gary the Government Worker, who are pissed that their friends Bob the Bartender and Charlie the Cabdriver get to skip paying taxes. Envy and jealousy are extremely strong forces.

But is it worth all the things one has to give up just to make sure life is fair?

In my experience, the more you try to make things fair, the more you actually make them less fair.

Huh? Please name even one example.

I’ve got one. Look at any country with natural resources. In a place like Norway, they try to ensure their oil wealth is fairly distributed throughout society. In Russia, they don’t even try to achieve fairness, and oligarchs run away with all the oil profits. Where would you rather live?

Start with the ACA.

It was championed as a way to fix all of the problems of our current system and give access to everybody. 9 years in and its a mess. Overrun with fraud and abuse, people were taken off the plans they were content with (after being told "if you like your plan, you can keep your plan") and put on more expensive plans. Deductions and premiums are increasing, lack of options (after being told there would be more options, not less) and now you're going to have even less people insured since employers are already opting to stop offering coverage in order to push their employees to the ACA plans instead.

And now? Now we're being told the only solution is the "medicare for all" option because the ACA is a massive failure.

> Only a few prefer liberty, the majority seek nothing more than fair masters.

- Sallust, Roman historian and politician

> Transactions equal to, or in excess of this amount would need to be made using the electronic payment system or by cheque.

Does Australia have a law that guarantees access to a bank account? Or would this proposed limitation imply that people who can't get a bank account for various reasons aren't allowed to transact anymore?

There is no such law, at one point the Commonwealth Bank of Australia (CBA) was state run but was privatized in 1996.

How often do the people who can't get a bank account for various reasons enter into transactions over $10k?

> How often do the people who can't get a bank account for various reasons enter into transactions over $10k?

I’m guessing the effects would be secondary. If your business serves the unbanked, and receives its revenues in cash, it may be more convenient to pay suppliers with that cash than to deposit it and issue electronic payment. Not sure if that pushes any businesses over the edge, but it’s a factor.

If you're operating a legitimate business maintaining proper accounting records, and dealing with other legitimate businesses who are themselves maintaining records and paying tax, I would guess that it's _still_ much easier to go to the bank and deposit your cash into an account than to pay your bills straight out of your cash.

Only 1% of Australians are fully excluded from financial services (no transaction account, no credit card, no general insurance)[1]. I doubt this law will have much of an impact on that small population.

[1]According to this report from 2013/2014: https://www.nab.com.au/content/dam/nabrwd/documents/reports/...

1% of Australians is still 246,000 people.

More than I would have expected. The report is long; was there a breakdown provided of the reasons for this exclusion? I assume that some proportion is voluntary and I wonder how much (and what the other reasons are).

You are being disingenuous by using the 1% figure.

Its actually more like 16% of Australians who cannot access banking services which would allow transactions greater than this imposed $10,000 limit, because General Insurance is a requirement of such limits (imposed by the banks).

There are no guarantees but they're not really needed. Australia isn't like the US, we don't have a large population of unbanked people. Banks are usually free, either because you have enough money to make the minimum deposit or because you're low enough income to qualify for a free account. The documents required to open an account [0] are also very basic necessities you'll need to live in general.

And I think practically, there aren't going to be issues here. Where are you storing >$10k if not in a bank? I think the kinds of people paranoid enough to do that aren't going to go around making >$10k financial transactions.

[0]: https://www.commbank.com.au/guidance/consumer-finance/what-d...

>Australia isn't like the US, we don't have a large population of unbanked people.

Yes we do: First-Nation people, who will now be excluded even more from large-property transactions ...

Do you have data to back that up? I had a quick look and couldn't really find anything about them in particular, just this NAB report [0] linked elsewhere in the thread that breaks down by a number of other attributes.

[0]: https://www.nab.com.au/content/dam/nabrwd/documents/reports/...

https://www.fos.org.au/custom/files/docs/ccmc-special-report...

Quote:

"Indigenous Australians are around twice as likely as non-Indigenous Australians to be financially excluded –that is, to lack access to appropriate and affordable banking services and products. "

Too often, Australian Aborigines lack proof of identity:

https://www.smh.com.au/national/aborigines-lack-proof-of-ide...

"MANY Victorian Aborigines are barred from obtaining a driver's licence, voting, opening a bank account and receiving social security benefits because their births were never registered and they officially don't exist."

"The sharing of devices leads to insecure banking, causing some to avoid online banking and Centrelink accounts altogether."

Just one more in a grand litany of incidents where Australian Aborigines are excluded from the society that stole the land from them ..

It think it is bad. Payment in physical cash should not be restricted. Otherwise the system will fail and then you will not be able to make a payment at all.

I use cash for all payments anyways. And if cash will not work, then we will pay by barter.

If a public institution was introduced to allow you to freely digitally transact and securely store your money would you feel similarly?

I may then be more likely to use a digital transaction for some cases, although still I would prefer to use cash as much as possible. (For one thing, it doesn't fail in the way that digital systems do. And, it can be used without a computer. There are other advantages too.)

Not all digital systems fail similarly, consider some sort of distributed hub and spoke system that could arbitrate transactions; thus mitigating a single point of failure. Also consider how much of everything we purchase today is entirely reliant on our digital infrastructure, if there were some calamity that entirely halted our networks I don't think legal tender would be any use.

There is good reason to have more than 10k in cash to have for your family in case a localized natural disaster or other emergency makes digital transactions impossible where your are, during a crisis. You may well need a transaction larger than 10k in cash for transport etc at that point as well.

rephrased: Would I trust Uncle Sam's servers with the entirety of my financial activity? No.

There exist cryptographically secure digital payment systems, but governments are moving against them just the same as cash.

You often pay for things > $10K in cash? You also pay by barter for those things?

Ever bought a used car?

Actually, I don't use a car. (Also, I still use a bank account when dealing with the government, but that is all I use it for.)

Yes but, I don't know why you made that comment lol. I was getting at the fact that most people who buy a second hand car, boat, motorbike, having renovations done, landscaping, etc would be used to handing over more than 10k in cash

No idea about Australia, but here in Finland all those examples would normally be paid via a bank transfer.

Anecdote time, but I've bought a used car that was about 100kms from the closest mobile phone reception. Hard to do bank transfers in the middle of the bush sometimes

Ah, that makes sense.

Finding a road without mobile reception here would be difficult.

Yeah, admittedly it's becoming less of an issue as times go on, but there could by other contributing factors to people not being able to do electronic transfers

I used a cashier's check when I did that.

Per the FAQ at https://www.treasury.gov.au/sites/default/files/2019-07/at_g..., consumer to consumer transactions, including sales of used cars privately, are exempt from this proposed law.

It's easy to call that exemption a "tax-dodging loophole" and close it once the law is already on the books.

I have. It was less than 10k and paid by bank transaction.

But how much an economy still relies on cash varies a lot per country. Every time bank or payment discussions come up here, I'm surprised by how primitive US banks still are. A few decades ago, my parents still had to pay the down payment of their house (f30k I think?) in cash. It makes sense that some countries are more ready to move to a completely cashless economy than others.

Whether or not that's a desirable development is a whole different and interesting discussion, of course. For tax and anti-fraud purposes, it is. For privacy not so much.

This is an appeal to lack of empathy. Just because I don't make large cash transactions doesn't mean I shouldn't care about the rights of people who do.

I go weeks without using cash, although visiting Sydney recently it seemed I was surcharged more often than not for using a credit card - not the case in Melbourne where it's still very uncommon.

How would this bill work in practice? People who use cash for tax dodging aren't reporting true values anyway. (have not read any of the documents)

I guess in the past they could have had a job quoted at $500K. Paid "in cash" with $400K and reported only $200K to the tax office.

Those businesses could still just have $200K paid by electronic transfer (reported to ATO) and the rest in cash. It does mean the tax dodging responsibility is somewhat pushed to the other party too which might make some people/businesses uncomfortable and avoid it entirely.

I am all for more fairness and having people pay the right tax. Too many builders and tradies sort things out in cash. The unfairness then extends further where people then become eligible for government subsidies because on paper they earn less - but really have just reported less.

edit: reworded for clarity.

There are countries where this type of restrictions to using cash for large payments have been in place for many years. They help with: - mitigating money-laundering risk - more effective application of sales tax - more effective enforcement (in combination with other tools) against income tax evasion.

There are several common types of money laundering today, exchanging deeds to offshore shell companies that own other shell companies that own real estate, private art auctions (where the bidder, seller, and artwork is private), etc.

Those are all cashless.

As best I can tell, it adds risks which may or may not be a sufficient deterrent - depending on the business.

Once $10k+ cash transactions are banned, questions will be raised over any cash withdrawals that a business makes that are near, at, or over that limit - and possibly over any regular ones that are below the limit but couldn't be easily explained away on other expenses.

For a business to continue the practice you've mentioned, they would need to keep sufficient cash on hand for making such transactions as needed, at all times. So there are all the associated risks of having cash lying around, on top of the risks of being caught.

It can be worked around, but for some businesses I can imagine that the additional loopholes will be considered onerous enough to stop bothering.

The issue is that there is no legal contract. If I pay someone $400k in cash for them to build a building, but they don't do it, I cannot sue them to get the money back since it was illegal to pay that way anyways. Alternatively, if the building was built first but they were never paid then the builders cannot demand payment through court.

The way the bill would work in practice is that if the government found more than $10,000 in your possession they’d steal it.

Seems pretty straightforward.

Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public?

For the time being people would just get out of their deposits but if cash gets banned then things become more complicated.

> Isn’t cash the only thing preventing banks from offsetting the negative interest rates to the general public?

No, literally every investment product, from government bonds to CDs, also plays that part. Cash is just the most significant counterweight to negative deposit rates.

(After taking into account fees, many depositors pay a negative rate to maintain banking privileges.)

> (After taking into account fees, many depositors pay a negative rate to maintain banking privileges.)

This isn't strictly true in Australia. Savings accounts where short term savings go typically provide 1 to 1.5% interest after adjusting for inflation (i.e 2% interest account with Australia's 1% consumer price index). If you don't have a mortgage or credit card debt, having money in an Australian bank savings account is usually a net positive.

Before taxes.

What about competition between banks?

Not when you don't have a choice _not_ to use one.

Cryptocurrencies seems to become the only "cash" alternative. Not saying I think it's a good (or bad) idea, but what else is there that resembles cash?

US dollars.

Even pseudoanonymous blockchains like Bitcoin aren't completely fungible like cash. You need to use privacy only cryptos like Monero, or zero knowledge proof contracts on Ethereum for that.

Digital currency is currently exempted but will apparently be kept under close scrutiny (Section 9).

https://www.treasury.gov.au/sites/default/files/2019-07/expo...

So, this is good for Bitcoin.

This limit exists in Greece right now too, but the cap is 300 euros. Pretty frustrating.

Any exceptions? I ask because that limit is very low.

Not that I know of. Stores like IKEA have signs mentioning that transactions over 300 euros must be done by card and don't mention anything else...

Recently, I was eating at the same taco place pretty much the same day, twice a week. I was paying with my debit card and on a whim while checking my account, I noticed they were charging me on days I wasn't eating there, for the same amount when I would stop and eat there.

It actually happened three times where I had to have my card replaced so they couldn't keep running fraudulent charges on my card. Third time I just switched to cash and haven't had any issues since.

I can understand having a cashless society, but then I think about how many times cash has saved me from dealing with fraud and my cc# leaking out on the internet. Or dealing with shady people from craigslist.

I don't get it, you kept going to the fraudulent place? How good are these tacos that you are happy to have your money stolen from your bank account?

A) The bank credited me back the amount so it wasn't a big deal.

b) The amount was minimal - around $7 per transaction

c) I wasn't checking my account regularly because I thought once it was fixed, it was fixed. I was usually a few weeks behind when I was getting billed and when I was catching it.

d) the tacos are magnificent and worth it.

Can you please share where this place is, it's name and what's good?

https://www.tacojohns.com/

primarily a midwest, mountain region chain.

The potato ole's are legendary. Anything with those is awesome like their meat and potato burrito. The taco bravo is awesome. I usually go there on Tuesday for the cheap hard shell tacos which are awesome too.

If you're really hungry, they have a "six pack and a pound" deal which is six tacos and a pound of potato ole's.

Every year on a bicycle trip (ragbrai.org) my family go to Taco Johns on Tuesday (Taco Tuesday!) and have a taco-eating contest. This year my middle son won, at 11.5 tacos!

> This year my middle son won, at 11.5 tacos

OMG that's crazy!! I eat three or four and I'm totally stuffed. No way I could ever down that many, so that's so awesome!

2nd place was 10. Third - 8. But these guys are all 6'4". When eating pancakes for a record, they top 30.

Don't worry about chasing down large multinationals who owe billions in tax revenue, best to just crack down on pot dealers and bricklayers paying for stuff in cash.

Yep.

Panama Papers, nothing.

Paradise Papers, nothing.

Multinational tax avoidance, nothing.

Banking Royal Commission, two years of resistance before being forced into it.

$10k cash payment limits. The legislation that doesn't solve any 'real' problem, that's what we get.

Slightly off topic, but why isn't a one dollar bank note worth more than one dollar in a bank today?

I have a very basic understanding of how bank works, so please correct me. If banks can only lend based on the reserve, it seems bank note should have more value to the banks.

There are two topics here:

a) the time value of money, and b) the fractional reserve system.

There is also a 3rd topic, which is inflation, which is implied in your question.

Topic 1: The time value of money is the bit about "a dollar today is worth more than a dollar tomorrow". The reason why this is the case, is because if I give you $1 dollar today, and you give me $1 dollar at the end of the year (metaphorically "tomorrow"), than I would have missed out on the interest I could have earned by lending it to the bank (in a savings account) or the Government (in a bond). I hope this makes it clear why there is a greater benefit to receiving money now, rather than an identical sum later.

Topic 2: This might be a mind-bender, but bank loans create money, not deposits. Don't believe me? Check out a Bank of England representative say the following in plain English:

"...banks create additional broad money whenever they make a loan"

"Now, while this is nothing new, it's sometimes overlooked as the main way in which money is created and it runs contrary to the view sometimes put forward that banks can only lend out deposits that they already have."

"In fact, loans create deposits, not the other way around."

Source: https://www.youtube.com/watch?v=CvRAqR2pAgw

Sadly the resources I had pointing to the Fed saying this has been taken down.

For more on this read the following:

* Werner, R. A. (2014). Can banks individually create money out of nothing (https://drive.google.com/open?id=0B5IFY-yq0O9IUHNTU0NaWTVQa0...)

* McLeary, M., Radia, A. & Thomas, R. (2014). Money creation in the modern economy (https://drive.google.com/file/d/0B5IFY-yq0O9IbEtsWlJZUFVxTzk...)

Topic 3: From the consumer perspective, inflation is stealth taxation... you have $10 at the start of the year... 3% inflation means that at the end of the year the $10 only buys $9.97 worth of goods... you keep that $10 in your pocket and you lose purchasing power in a compounded way (the inflation eats and eats at your purchasing power).

You then might ask, "why do the financial press and central bankers all talk about inflation being good?"

Well, the fiat fractional reserve financial system relies on inflation... in a way inflation is like a 'healthy' indicator for this messed up system where money has no intrinsic value (i.e. not backed by gold like the US dollar was prior to Nixon closing the gold window in 1971). Basically, the more money created the more value is siphoned away from a population to the banks and government. I think of the world as stuck on this giant hamster wheel where people are forced to keep working, keep spending, keep investing and keep being taxed.

This is why the Governments of the world bailed out the banks. Government fiat currency is a con, indeed the whole system is a con. Money is not backed by anything except faith that the Government can seize the wealth of its citizens or tax the wealth creation of its tax residents.

I think the last 'real money' died with the Swiss franc which had a legal requirement that a minimum of 40% be backed by gold reserves. However, this link to gold, was terminated on the 1st of May 2000 following a referendum.

To illustrate my point, prior to 15/08/1971 (when Nixon stopped US dollars being converted to gold), $35 bought 1oz of gold. Last time I checked 1oz of gold is worth $1,476.06. This should make you stop to consider how much wealth has been transferred via inflation.

For a more detailed explanation and history see:

* Griffin, G. E. (2018). The Creature from Jekyll Island: A Second Look at the Federal Reserve

* Maloney, M. (2013). Hidden Secrets of Money (https://www.youtube.com/playlist?list=PLE88E9ICdiphYjJkeeLL2...)

* Still, W. T. (1996). The Money Masters (https://www.youtube.com/watch?v=HTPKJJ_CHjQ)

The "Money creation in the modern economy" paper makes it clear that fractional reserve banking is not how banks work - a fractional reserve system is based on banks lending out deposits, which as you say is not true.

> Money is not backed by anything except faith that the Government can seize the wealth of its citizens or tax the wealth creation of its tax residents.

Money has always been "backed" by nothing more than confidence in its utility. How often have various governments and rulers throughout history either arbitrarily changed the amount or type of material used to back money or simply not had enough of it around to back up the money in use? Commodity money is just fiat money pegged to an arbitrary amount of stuff, you still have to trust the government to maintain the peg and have the required stuff somewhere.

So my access to the economy can be terminated at the push of a button? That doesn't sound appealing. I suppose I could always barter.

This is a restriction on physical cash, there is no mention of electronic cash let alone cryptocurrency.

There is under https://www.treasury.gov.au/sites/default/files/2019-07/expo...

The definition of Cash under this legislation is:

cash means either or both of the following: (a) digital currency; (b) physical currency.

Physical cash is still a very valuable thing [1], and restrictions to it should be resisted on principal, not just because of technological progress.

[1] https://aeon.co/essays/if-plastic-replaces-cash-much-that-is...

"We need to see everything you do for your own good"

It's clear that cash is going to disappear, it's only saved by 50+ year old people that refuse, on average, to stop using it, which means we have at best 30 years left of shrinking financial freedom. Cashless society with perfect surveillance is going to mean confiscatory taxes and behavior control on a level never thought possible in the Western world. Some countries like Italy already have a much smaller limit in place - €1000 max [1]

It's going to mean currently "absurd" and "extreme left" ideas like maximum wealth cap. The idea that "no person should have more than $10M" would be easy to sell even today in most countries, the only reason it doesn't happen is because it's impossible to enforce - such a country today would only see an enormous capital outflow and rise in cash deals. With nearly perfect global surveillance, which is already in an advanced stage of construction - FATCA, CRS/AEOI, ban on bearer shares - escaping with capital would be impossible. Either the next or the previous stage would be of course maximum income - eg. "no person deserves to earn more than $150k a year".

After that, individual limits on "productive" and "not productive" spending are going to appear, amounting to another form of taxes - an individual annual limit of eg. $1000 per year on video games, $1000 for "unhealthy" soda drinks. An illegal barter market would emerge, fought in the same way drug trading is fought now.

The inevitable end of this system is a tiny global elite class of bureaucrats, not "legally" owning any significant wealth but controlling enormous amounts of it (Putin and Chinese Party style), and billions of serfs for whom it's illegal to even try to get wealthy. A return of aristocracy in all but name - with serfs better fed and healthier, but with less personal freedom than even Russian peasants under tsar.

Cryptocurrencies with anonymity, getting too big to squash before that happens, are the only hope left.

[1] https://www.italy-uk-law.com/new-restrictions-on-the-use-of-...

I wonder how this really will work in practice. Tradesmen are often paid in cash, and a business might quite reasonably take out a large amount each week to pay the workers on the job site. In some industries such as mining and oil work it is not uncommon to get the pay packet in cash, though perhaps less in Australia these days.

> Tradesmen are often paid in cash

Tradies here are stereotyped by (not all) unscrupulous operators that use cash to do jobs 'off the books' in under-quoting their true income or offering a discount to customers for unlawfully not charging the GST.

Bank transactions provide the tax office an audit trail. NB: The 'blackeconomy@...' feedback email hints at the purpose.

Which of the dozen documents on this page mentions cryptocurrency? I don't want to search all of them individually.

"That said, some forms of electronic payment more closely mirror physical currency. In particular, crypto-currencies and other digital currencies are generally unregulated and do not create clear records of transactions in a form that can easily be used to identify the parties to a transaction."

https://www.treasury.gov.au/sites/default/files/2019-07/expo...

The first one

In this Act: cash means either or both of the following: (a) digital currency; (b) physical currency.

Interesting, if crypto is cash, then no CGT on holdings? I’m dreaming of course!

It sounds like currency trading is still subject to capital gains tax. There's no magic classification that will make cryptocurrency tax-free.

We've had similar laws in Belgium for many years. Cash transactions over 3000EUR aren't allowed.

Notably, like the proposed Australian bill, this rule in Belgium does not apply to transactions between consumers, e.g. a transaction between two individuals for a used car sale.

https://www.nbb.be/docs/ts/enterprise/activities/notes_coins...

The submitted title was "Australia to make bitcoin payments above $10k illegal", but a moderator changed it to the article title, in accordance with the site guidelines: https://news.ycombinator.com/newsguidelines.html.

Big Brother is monitoring your transactions.

The worse our world runs into the digital rabbit hole, the less I participate in it. As much of my life as feasible is now transacted in cash, and I no longer even own a smart phone.

This is not progress.

Australian money is made from palm oil. Its an attack on borneo

On one hand this is just codifying common sense; cryptocurrencies aren't even good for payments and everybody already assumes that only criminals use large amounts of cash. OTOH I predict that innocent people will get tripped up by this law while criminals mostly won't.

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