Turnbull Government to target $100 notes

By Leith van Onselen

The AFR has reported today that the Turnbull Government’s Mid-Year Economic and Fiscal Outlook (MYEFO) will include the creation of a taskforce aimed at combating the cash economy, which is estimated to account for around 1.5% of Australia’s GDP, which equates to roughly $21 billion.

The taskforce will be headed by former KPMG executive Michael Andrew, and one of its priorities will be to investigate the large number of $100 notes that are in circulation, despite the growing trend toward electronic payments, and will draw upon international experience.

According to the minister for Revenue and Financial Services, Kelly O’Dwyer:

“We are talking about very significant revenue. I won’t put a specific number on it…but even if you got a reasonable percentage of that we are talking billions of dollars”…

“We’ve got three times as many $100 notes in circulation as $5 notes and we’ve got about $30 billion worth of $100 notes in circulation at a time when increasingly we have people more and more using electronic payment systems,” she said.

“It does beg the question ‘why’ and that’s something the black economy taskforce will focus on.

“The truth is the movement of money is a significant issue. It’s much easier to take a suitcase full of $100 bills than a suitcase full of $20 bills overseas.”

The taskforce’s final report will be delivered in October 2017.

In September, Peter Martin described the explosion in $100 notes as follows:

Twenty years ago there were only five $100 notes per person in circulation. They were less common than $20 notes, which was appropriate given they were far less used. A decade later in 2005 after the introduction of the goods and services tax (the one we were told would kill the cash economy) we had seven per person, and now we have 12. A graph included in the latest Reserve Bank annual report shows the number of $100 notes in circulation climbing faster than any other denomination.

ScreenHunter_16114 Nov. 15 09.01

The last time I reported on this issues I supported the abolition of that Australian $100 note, claiming:

Phasing-out large denomination bills makes a lot of sense. It would make life difficult for the black economy such as organised crime and tax evaders, as well as those engaging in welfare fraud… We are turning into a cashless society anyway, so phrasing-out these bills wouldn’t create much of a burden to the ordinary law-abiding person.

My view, which has not changed, was greeted with outrage from MB’s readership, receiving some 270 comments. So, get at it boys and girls 😉

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Comments

      • Exactly Gavin, I have just read another thread on today’s MB
        “Coalition Carbon mess comes home to roost(in your bill)
        There it was pointed out by many commentators that Australia is not capable of running a secure power grid.
        So why the rush to electronic money?

    • Because when shit hits the fan you need currency that can continue to circulate. No currency means a government or enemy faction can target key bottlenecks to completely shut down or control an economy (e.g. Limiting ATM withdrawals, cutting power, knocking data centres or internet links offline).

      Also physical currency is a lot harder to ‘hack’ than a digital currency. Digital anything can be perfectly replicated. Mechanisms for signing and trust have all been successfully undermined. Bitcoin is only ‘stable’ by gentlemen’s agreement.

      • Mollison forsaw this and his Permaculture work included preparing for a barter economy. Sustainability self support community formation non GM nor patented seed saving and rebuilding soils to be productive. He had problems getting access to govt venues in Australia because of this, in other countries he was lauded.

      • Yup.

        Who cares about banks. Bitcoin.

        The black market economy is now bigger in digital than paper. This will only accelerate the process losing the government even more control over revenue and its ability to regulate.

        Stupid, stupid, stupid.

        .

    • Because people (wisely) do not trust the Government.
      When you control a country’s banks and financial system you control the country and its people.
      Just look at Greece and its Capital controls.

    • the proliferation of $100 notes……….perhaps the taskforce could focus on the Chinese and their efforts to debase the confidence in our currency through massive forgeries circulation….oh that’s right the Chinese have already injected the $50 note base with untold forgeries that nobody can identify a real note and a fake note any longer.

      and it was the LNP and Labor party that willingly allowed the importation of suitcases of currency for the alleged ‘cash’ purchases of used residential real estate in Australia……remember that in the headlines and every real estate agent boasting of these sales.

      The Australian government and their taskforce is a pathetic malaise of failed policy and abhorrent politics that deserve to be confined to the dustbin of history or shoved into dark corner somewhere and forgotten about.

  1. CornflakesMEMBER

    The backbenchers will not like this…. It will mean the brown paper bags will have to be twice as full if using $50s instead of $100.

    • ResearchtimeMEMBER

      From personal experience – its very annoying… I always ask for $100 notes.

      But to think it would stop the black economy is just naive. Hell, write a cheque! Pay in cartons – done all the above plus more!

      More socialist claptrap for the “Big Brother”

      • Cheques are linked to bank accounts, which feds can peer into. Physical goods are generally bulky and hard to liquidate. Gold bullion will show up clearly on an airport scanner. (Not necessarily as gold, but as metal). Cash is pretty much a bearer bond, lightweight and undetectable. Can be liquidated in just about any country with a decent bank or airport.

      • Cash shows up on x-ray scanners as well. It weighs half as much than equivalent value of gold (gold is around $50k aud per kilo, $100 note is around 1g per note), but is much bulkier.

        If we are talking about CYN, then it would weigh over twice as much as the equivalent value of gold.

      • I see it as another relatively “easy” measure that the Government will try and take.
        They simply do not have the cojones a undertake bigger (unpopular) changes.

      • ResearchtimeMEMBER

        OK – not that I have anything to hide… but whats the difference in paying via $50 notes. Absolutely none.

        This is the lack of logic applied in many of these socialist flights of fancy. They assume (dishonestly I may add) that the inconvenience of carrying a %50 note will limit your ability to pay cash??? FFS That is a low bar of intellectual endeavour for any one to jump over.

        Truth is, they want you not to have cash to hold physically, rather store it electronically, so they can rob you with negative interest rates!! Thats EU enlightenment for you!!! Seriously, a real lack of out of the box honest thought sometimes. Its like, pick up a line – and run with it… rather than ask the question why? Do we trust these bastards. Instead its a call for Big Brother over your shoulder all the time.

        Be careful, you will lose a lot of subscribers (not myself of course) as a result of this mindless adherence to ideology. People just won’t buy it anymore, no matter how PC.

  2. Hypocrites. They’re worried about the proceeds of crime, taking suitcases full of cash out of the country, but bringing them in and trading them for property is fine. And it’s KOD no less. This should be a successful program.

    • Exactly just more window dressing… just farkin clamp down on illegal buying of property it’s what Joe (me) wants to see.

    • Correct. Laundering throug the AML exempt property market is fine. But that supports the banking system.

      UE, does it not concern you that we will possibly have negative rates soon and bank bail ins like Italy ?

      Or that the Feds now monitor your internet and phone traffic and now this plan the thin edge of the wedge will monitor every purchase you make.

      On the plus side, those of us who have had unfathiful wives will now be able to monitor what they are up to more effectively if you can be bothered.

  3. Mining BoganMEMBER

    Well, I doubt anyone would know more about suitcases full of $100 notes than St Mal and the LNP. Maybe we should listen to them.

    Worked well so far.

    • Mining BoganMEMBER

      I was listening to the wireless when a nice lady from the ATO came on and said that luckily, just luckily, they had backed up all the information only the previous day. Shouldn’t that happen every day for something like this? IT people help please.

    • Lol they replicated the failure to the fail over data store – I wouldn’t trust their backups to be clean! There’ll be billions in law suits for a decade once business figures out they challenge the data integrity

    • A perfect example of why electronic money is not safe and secure.
      In this age of windmill inflicted power black outs a wad of cash is essential back up.
      Correction; in this age of flimsily constructed high power pylons etc , etc.

    • Yep.
      Suitcases full of hundreds disappearing = BAD
      Suitcases full of hundreds showing up from China = GOOD.

  4. A one year count down to get them in should be enough.

    If they do look to get rid of them it will be interesting if they enforce a deposit instead of an on the spot swap for 50s. From the discussions (gossip) I hear when around retirees there are two ways to get a pension. A lot of hidden cash, or a ‘gift’ to a child with an agreement to pay the tax that the gift leads to. If the deposit path is taken there could be a lot of ‘gifts’ been given in the near future.

  5. Not even worth commenting as you have failed to address one single concern raised by commentators in your last article.

  6. Jake GittesMEMBER

    This is a real problem for anyone wishing to exhibit gaudy vulgar materialism: snorting your favourite white powder up $50 bills hasn’t the same effect. It tramples on core LNP values.

  7. Interesting how easy it is for the Feds to set Australians against eachother. They float an idea like this and most people say yeah get the crooks not realsing they are slitting their own throats.

    Get ready for negative interest rates bail ins and total government surveillance. First it was the internet now its the economy.

    How can you be free when the feds monitor everything you do, and will have the power to just turn you off.

    This is been rolled out globally.
    Malcolm must have picked this up at the last Council on Foreign Relations gab fest.

  8. “My view, which has not changed, was greeted with outrage from MB’s readership, receiving some 270 comments. So, get at it boys and girls”

    Maybe you could put up a solidly reasoned argument of your own first (rather than copy and paste from the MSM). You haven’t addressed any of the valid concerns raised from the last article, you could start with those summarised in this comment: http://www.macrobusiness.com.au/2016/11/calls-eliminate-large-denomination-bank-notes/#comment-2750539

  9. How is it working in India? What impact is it having and how successful is it?

    Personally the only reason to clamp down on the cash economy is to deal with all the tradies, property investors and hospitality folks (basically SMB’s) dealing only in cash and avoiding any tax…

    I see it all the time and as someone who paid substantial tax last year and will likely again this year it makes me pretty cross to be honest. Nobody ever gives you a medal for paying tax..

    • Worked great in India…the economy is now really taking a turn for the worse.

      Best part…Indians are paying up to US$2,500 for an ounce of gold…makes you really look at what is happening in the future.

      • athalone, latest in India is that police are going house to house and taking gold. Married women can have 500g men 250g.
        India is on its knees.
        its coming.
        Bonds are beginning to collapse, so interest rates will go up to buggery.
        Govt interest on debt, banks borrowing/refinancing their borrowings of rate mortgage lending will go up heaps.
        The SWHTF for govts, banks so they need your money and mine.
        This tax avoidance story is just a way to sell removal of cash.

    • India is actually a slightly different scenario. I think the claims that India is going after black money is legit, because they’re letting you convert to a higher denomination note. That isnt to say that its only about black money, Im sure control is in there too.

      Whereas Australia and MB are talking about complete elimination of the $100. Not eliminating it and replacing it with a $200 like in India.

  10. Yeah it’s a potentially good idea in principle, but ONLY if we have a practically fee-free electronic alternative. None of this surcharge nonsense. There’s a place in Melbourne Central that charges you $1 for using a card to buy a $7 pancake! But I know it will just be a gift to banks and credit card companies.

    I think the long-term concern, and certainly part of the internal brochure, is that when it comes time to bail-in the banks, it will be much easier to take people’s money if there’s little cash and they can’t withdraw their money.

  11. This is from the BIS: http://www.bis.org/speeches/sp161206.htm

    There are academics and politicians advocating the abolition of cash. What do you think of that?

    Negative nominal interest rates, especially if persistent, are already problematic. Quite apart from the problems they generate for the financial system, they can be perceived as a desperate measure, paradoxically undermining confidence. Getting rid of cash would take all this one big step further, as it would signal that there is no limit to how far into negative territory nominal interest rates could be pushed. That would risk undermining the very essence of our monetary economy. It would be playing with fire. Also, it would be quite a challenge for communication, even in simply economic terms. It would be like saying: “We want to abolish cash in order to tax you with lower negative rates in order to – tax you even more in the future.”

    Why?

    Because the reason for doing this would be to raise inflation – which is perceived as an unjust tax on savings. This would require people to have faith in the “model” which policymakers use to steer the economy. Quite a challenge!

      • Nah Jimbo They are coming after them as well. Maybe we can move them offshore – but even then…maybe you bring them back or go to gaol. There is no limit to the badness of this.

    • Exactly. All part of future bail-ins to continue propping up this cesspool of a global economy. They will get resistance from anybody above the age of say 25, but the future generations won’t know any different and will assume it perfectly “fair” for banks/governments to raid their savings.

      The IMF/BIS have been talking about this for a longtime.

    • Why would you need to keep your digital currency in a bank ? Seriously why ?

      Answer – you will not.

      Bitcoin will end banks.

    • Indeed the motives for this are unclear and are unlikely, in my opinion, to be the ones stated.

      This is in preparation for something they believe will happen either by plan of consequence to past mistakes. This is about changing the rules of ‘money’ being a store of wealth. Perhaps a universal bail in perhaps something else, but the common thread is the misinformation being pedalled.

  12. https://barnabyisright.com/2011/06/24/our-banking-system-operates-with-zero-reserves/
    This is why we need cash! So you can get it when SHTF. It’s your money , why does UE not want you to get your money?
    I’ve personally pulled large amounts out when the bank chicks were smart arses. Just cause I wear a flanney and thongs. Anyway when I said can I have all my money out she thought I had none and said yes. I repeated my question , can I take my money out in cash today. Again she said yes. I said I’ll be back after school pick up. She said ok. Went back after school and swiped my card and said Cash Please!!!
    Didn’t she get a surprise! Next thing manager came out BlaBlaBla , got half out that day and rest next. That smart arse bank chick would have got a reaming as I walked out with my kids and a shitload of money.
    Funny thing is they only count it once going out but twice going in. Thats why we need cash! Keep the bastards honest.

    • No need to do that. Just width draw the lot over your mobile phone via the Bitcoin block-chain.

      Throw your mobile in the river.

      Move to Cook Island.

      Access block chain.

      Banks are irrelevant – its a matter of time.

      • Google ‘bitcoin 51%’

        Small operators keep bumping into 51%. Imagine if a state actor wanted to completely fuck the blockchain, either take it over, diminish faith in it, or deny service. Bitcoin is not a solution against a government serious about robbing its citizens. They could easily spin up some AWS and private servers. They wouldnt even need to do anything to the blockchain. Just the articles about “China/Australia/Germany/Britain achieves 51% hashing power” would have the rats fleeing the ship as quickly as they can. Even if you didn’t run, the devaluation would screw your savings.

      • No one is denying that technology can be corrupted by the state. Then again – the state can completely and easily corrupt cash. Take a look at Zimbabwe or Wiemar Germany to what happens when the state excessively interferes with the economy and cash.

        So yes – the state can absolutely crush Bitcoin – but it would at the same time remove its own legitimacy and be exposed as despotic. As soon as that happens people will resort to non-state backed means of exchange, again, immediately removing the states capacity to regulate and control.

        People simply fail to understand that a state operates on the basis of mutual benefit to the citizens, it is done as a “social contract” where both must benefit and the state only operates on the good will and trust of the people. If this is lost then the state can only proceed by force – the legitimate monopoly of violence as it is known from Weber.

        So if the state decides to remove cash and destroy citizen trust in technology in order to enforce state mandated and controlled banking cartels then they will immediately lose legitimacy and alternative means of exchange – currency – will rise and the government loses all control.

        There is no ifs buts or maybes about this. Any prison system and its medium of exchange – contraband to favours – will tell you this.

        So yeah. The state could turn off all the electricity, cut the internet, destroy blockchain – sure. They can do all kinds of things. But they will lose all legitimacy and alternatives will immediately be found.

        On 51% – it like cornering the currency market – we all know who did it, and why, and they will be out of business within seconds.

        Hudson believes, along with thought leaders in the industry such as Andreas Antonopoulos, that possessing 51% of network power is not enough to enable an all-out attack.

        In theory, one might be able to affect the next block or two, launching a double-spending attack by holding on to enough power to confirm the majority of transactions. However, this would take a huge amount of expense and effort and, should a big double spend be attempted, the data would likely appear on the block chain for all to see.

        should a pool try to mount such an attack, bitcoin’s core code could be changed to destroy that company’s business. It just wouldn’t be worth the risk on several levels.

        Finally.

        Blockstream Co-Founder Matt Corallo gave a talk at an SF Bitcoin Devs event where he covered some of the basics of what blockchains are and how they work. During the presentation, Corallo got into the topic of the 51% attack and how people need to understand that controlling 51% of the network hashrate is not some magic switch that makes double-spends and other nefarious activity possible.

      • Whats all this BS about Bitcoin? It CAN & HAS just disappeared from peoples accounts.
        ALL digital money is fraught but bitcoin has a track record that any cautious person should heed.

        Just for the record they can’t destroy Gold.

  13. So the criminals will all stop doing criminalising cos they now have to buy twice as many suitcases.

    Righto.

    As others mentioned these measures with the same argument attached, are happening globally. The conspiracy theories on reasons for an eventually cashless system are far more plausible.

    • — – also please explain why 95% of all filmed Drug busts show bundles of $50 notes – -not $100 !
      This grab on $100 notes has to be fought –hopefully by convincing Lab et al to block the bastards.
      The $100 note was first introduced to Australia in 1984 — 32 years ago !!!! . Obviously worth a lot more then than now.
      “They” want control over your life – this is a big deal & must be fought.
      As for the author saying it’s his choice — well GF!

  14. Interesting how this is really starting to gather steam. India has been an interesting case study as such. I was waiting for the topic to come to AUS and here we finally are.

  15. Two things.

    Currency is a means of exchange. Going digital means going Bitcoin. Which means – larger black market economy.

    No, seriously – this will simply expand and widen the black market economy. Nodal internet is arriving as we speak – it is entirely impossible to control it – think of it like the block-chain in bitcoin but for the internet. Couple this with Bitcoin and we are in a situation where digital currency is HARDER to track than even the serial numbers on cash. Even Gold is easier to track with isotopes.

    Soooo – another own goal.

    Secondly this is another stupid, ill conceived budget repair measure which sits right alongside the ATO data matching against welfare cheats, which I suspect will end up in a class action, sorry, I ABSOLUTELY GAURANTEE it will end up in a class action and result in massive losses for the government.

    The ratings agencies will see it for what it is – another attempt at diversionary tactics from fixing their fiscal position – DOWNGRADE.

    The LNP are trying every and anything to fix the economy except confront the start ideological impasse of keynsian stimulus and business tax and high wealth loop holes. As such they are getting more and more extreme an desperate in their attempts.

    Ratings agencies will be watching in absolute aghast at the policy measures they are coming up with. And supporting the removal of “currency” from an economy is delusional. Just utterly delusional.

    It will be immediately replaced with utterly unregulated alternatives destroying budget capacity and governments ability to regulate.

    There are some seriously short sighted people out and about today.

    .

    • There are some seriously short sighted people out and about today.

      Yes -and your rants about Bit coin makes you one of them. You must have FA living experience & be under 20?

  16. When the best argument people can come up with is that it will make life harder for “criminals” you can be sure that some other criminals don’t like competition.

    What on earth is wrong with people holding cash if they choose to? As many have noted – criminals will readily find some other way of settling their transactions.

    Opposition to cash usually boils down to the latest efforts by the private banks and their minion neoliberal cheerleaders wishing to extend the already virtual private monopoly over money creation to a complete monopoly.

    For all the claims of the MMT crowd that fiat issuing governments are not limited in the capacity to create money – in PRACTICAL terms – their hands are tied by the constant efforts of the ADIs to defend their franchise over public money creation by demonizing the competition in the form of a fiscal deficit (preferably the result of less taxation rather than more spending). As inflation is a constraint – only so much money can be created and the ADI want it to be them rather than the elected government.

    And we only need look at house prices to see what happens when the ADIs have a virtual monopoly on public money creation.

    Without useful cash most will be forced to use banks deposit accounts. Typical of the FIRE sector to try to sell the idea on the basis that they will happily allow corporates and public sector authoritarians to scrutinize transactions in those accounts.

    It fits perfectly with their constantly bleating about balanced budgets because they know, that if the government is removing from the economy the same amount of money as it releases into the economy via expenditures, that just creates a more important role for banks to crank out the new money that a growing economy requires.

    And they charge a trailing commission – interest – when they do so.

    The most damaging privatisation of a public good was the privatisation of public money creation.

    We should be talking about reversing that terrible policy error rather than completing the process.

    • Most people now must be paid into their bank account, and if they want some basic telephony access they will likely need some credit history. That horse has certainly bolted.

      • Fekname,

        There is nothing wrong with bank accounts – they can be very convenient – especially the various payment systems operated banks.

        There is also nothing wrong with a bank creating IOUs and recording their liabilities for them in accounts.

        The issue is simply the idea that the Central Bank should be the lender of last resort for ANYTHING other than honoring the IOUs of the government.

        If Westpac want to issue their own bank notes (promissory notes) they should be allowed to do so but they should NOT be given 1 for 1 status with bank notes / coins issued by the RBA.

        In this wonderful age of smart phones and computing power the public can quite easily maintain accounts in RBA / Public money and separate accounts for foreign currencies (i.e. the private currencies issued by private banks and other organisations).

        Switching between the two will be simply a matter of an exchange rate between the public money and whatever private bank currency or foreign currency ones chooses to use.

        Bit coin is simply a form of a private currency – nothing wrong with that at all. What is wrong is giving the private currencies of private banks the status of public money.

        Easy to fix as well.

        Just restrict their capacity to create new public money progressively while expanding the supply of the the RBA / Govt issued variety by cutting tax. Over a period of a year or two the ADI power to create public money could be completely abolished.

        As the Federal Budget is approximately $400B there is going to be no difficulty in running the required deficit just by cutting tax – say by increasing the tax free threshold.

      • ResearchtimeMEMBER

        Heck RBS prints its own currency under Royal charter. If you ever visit Scotland, you will know what I mean!

      • I think my reply was based on a misreading. Something along the lines of “Whats wrong with getting paid in cash”. Im no supporter of eliminating bank accounts, and I’m pretty apathetic towards eliminating the $100 note. I don’t have any views on your ideas about mutli-currency.

    • Not surprisingly I disagree.
      This is the first good idea Turnbull has come up with.
      The way to get around the bank monopoly thing is to allow the RBA to issue checking accounts direct to the public. Just convert base money into electronic money at the CB. The Bank of England has already considered the idea. It will probably happen.

      • Sweeper,

        “…The way to get around the bank monopoly thing is to allow the RBA to issue checking accounts direct to the public. ..”

        I agree though it would not matter if the banks operated consolidated accounts that were directly tied to RBA accounts. Bank customers could choose to deposit their money into an “RBA” linked account.

        They could also choose to move that money out of that account into a separate investment account to earn interest and risk losing that money if the returns did not eventuate.

        The important point is that because their RBA linked holdings are held with the RBA there need be no taxpayer guarantee of banks. If they fail the RBA could just shift their deposit to another bank of their choosing or as you say open a direct account for them at the RBA.

      • You’re a nutter, convert what to what? Accounting entries for accounting entries – best idea ever huh?

    • @Pfh007 – – well said .
      When the best argument people can come up with is that it will make life harder for “criminals” you can be sure that some other criminals don’t like competition.

      What on earth is wrong with people holding cash if they choose to? As many have noted – criminals will readily find some other way of settling their transactions.

  17. The main reason for getting rid of cash?

    So you can’t have a run on the banks…most people, probably 95% will just leave it in there.

    When you have even 5% of people lining the streets trying to get their money out of the bank, people panic.
    And this is the only early clue for most of the population to realise that the banks are insolvent.

    Everyone realises that the economies of the world are in big trouble, and we all know that our government is pretty slow off the mark.
    We also know that Trump wants a crash early so he can pick up the pieces from Obama rather than taking the blame himself.

    Governments only worry about themselves and their cronies.

    Got gold?

    • Sure do Doc.

      You may be right. If this is really about the black economy, tradies not paying tax etc, then I’m all for it. But once again the hypocrisy from Government is staggering. Instead of slashing the ATO to the bone they should be ramping up efforts there.

      I’ve heard of many a tax dodging tradie getting their just deserts when the ATO comes knocking and asking how a bloke with consistent declared earnings of $45K lives in a $2m house and purchases a $150K boat and 4WD combo during a 12 month period. If they hadn’t slashed resourcing that program would still be reaping rewards.

    • @athalone – – spot on re :
      When you have even 5% of people lining the streets trying to get their money out of the bank, people panic.
      And this is the only early clue for most of the population to realise that the banks are insolvent.

  18. [email protected]MEMBER

    Q:how many lnp will cross the floor to kill this?
    A: enough

  19. I’m still in Vietnam at present and took cash with me to exchange while here for spending money. Every money exchanger I have come across has $100 notes, I only brought $50 notes as I withdrew them from the ATM. How many other money exchangers and foreign banks have pools of Aussie $100 for exchange purposes across the world? Maybe instead of blaming criminals they should be considering this?

    As for cash economy and tax avoidance, I think many of the Asian businesses I’ve visited whether a restaurant, store or supermarket, do not put anything through the till to register sales and/or pay their staff in cash to avoid paying tax.

    In Vietnam it is common for stores to only deal in cash and not pay any tax to government. Perhaps our Governments problem is one self inflicted by pursuing the population ponzi and sourcing so many immigrants from countries where tax avoidance and working in cash is a cultural norm?

  20. Go ahead and copy India – and watch your country go down the drain.

    These politicos simply cannot accept that people can trade with one another without it all being on their bank statement. If they seriously wanted to look at the black economy, they should check out all the trusts and the accounts that are offshore.

  21. Honestly why don’t some of these politicians grow some balls and do so something about this economy

  22. The ECB are targeting 10,000 Euro notes, while Australia is targeting $100 notes. This tells you which stratum of society each group is eager to crack down on. The Japanese have a 10,000 Yen note, similar in value to the Australian $100 note, which they refer to as one “Man”. English speakers in Japan often think of it as in some sense the currency for the common “Man”.

  23. Step 1, ban $100 notes
    Step 2, ban all cash (cards and electronic payments only)
    Step 3, negative interest rates (force people to spend)
    Step 4, complete control over all purchasing and spending

    • @ tripster, if that was the intent it would not work. People would put all cash into hard assets and the market. Gold would go to the moon. It would in fact create an even bigger mis allocation of capital than we already have.

      • No, that’s precisely the point. If we enter into a severe recession or depression, then it empowers the government to stimulate the economy in a way that QE has proved unable to do.

  24. WW,

    Could you elaborate please? Where is “up here”? Mind you, I am not after exact coordinates of your unfortunate boating accident.

  25. Diogenes the CynicMEMBER

    This government has fallen even lower than the low expectations I had set them. It is all part of the move towards negative interest rates, bailing in and protecting the banks which are very vulnerable to a short term credit squeeze or a run. Can’t wait till they lose the AAA rating, have a recession on their watch and are booted out of office for a very long time.

    • Why the assumption that this will benefit the banks?
      Experience with negative interest rates across the world is that it hurts banks.
      Hurts banks, bond holders, and criminals. Yet 90% of above comments are against. Strange.

      • @Sweeper
        Why the assumption that this will benefit the banks?

        Because you’d have to be real thick not to see that the Banks win & Control if there is NO cash.
        Cash is freedom — if you can’t work this out on your own -you’re ion for a world of hurt if it ever gets up.

  26. ‘We are turning into a cashless society anyway,’
    That is not fait accompli.
    ‘so phrasing-out these bills wouldn’t create much of a burden to the ordinary law-abiding person.’
    Begging the question. Blind Freddy can see your reproach statement.

  27. Leith do you want remove $100, remove cash, complete control by Banks (Goldman ?) neg interest rates, complete control of all people all money so no bank runs, no protection against bail-ins.

    1. if because of 21BN tax avoidance the removal $100 notes wont stop that.
    how about Corporations pay up that will be more than 21 BN.
    what about Turnbulls tax avoidance in the Caymans?

    2. Modi has just taken out the largest notes and India is on its knees. Venezuela has just removed half it money from circulation. Norway another countries are starting to remove cash.

    This is been discussed as a control measure by tax hungry govts and likely their banks in the last 18 months or so. G20 likely G7.

  28. I like have to cash available – nice to have something that isn’t entirely controlled by (private) banks and something that has some kind of Government guarantee as opposed to a bank balance that is nothing more than a private bank IOU.

    This has nothing to do with doing business illegally – just a matter of principle.

    Do people in AU realize the AUD 100 note is already an extremely low value denomination? The largest EUR note is 200; that’s about AUD 300 !!! No chance of that being taken away.

    At some point I needed to buy a car – in cash. Getting it was a funny experience; a fully honourable transaction but I was almost treated like a drugs dealer.

    If AU heads towards a cashless society people will simply find other stores of value (gold, etc.) which are not private IOU’s – because in the end they cannot be trusted fully. Especially in Australia where banks have no official cash reserve requirement and lend like crazy in the RE Ponzi scheme.

  29. CounterfiatMEMBER

    Swamp creature learns how to make FIRE sector.

    ‘My view, which has not changed, was greeted with outrage from MB’s readership, receiving some 270 comments.’

  30. The thin end of the wedge … take away cash and government has 100% control of its citizens’ lives. They are literally at the mercy of their government. Capital controls inevitably follow … ‘one-off taxes’ on bank deposits etc etc etc. You suddenly find you’ve woken up in a totalitarian State and feel gutted that you didn’t stop it while you had the chance.

    It’s so Orwellian, it should chill any sensible person to the bone.

    • @Dominic
      It’s so Orwellian, it should chill any sensible person to the bone.

      You are so right! I’m bowled over by the % that don’t see the danger. Amazing.
      But worst of all is that MB is pushing this crap & saying it’s a good thing. What crap.

  31. DarkMatterMEMBER

    By my calculation 12 $100 notes over 23m population is about $27Bn. Presumably decommissioning this note would force $27Bn to be flushed out through the banking system over a short period. Can anyone explain exactly what would be the financial effect of this operation? Would the ATO use this to prosecute people? Would the $27Bn be counted as GDP? Would it help with the budget?

    It seems like there are many possible aspects to this that are way beyond my ken. Any expert opinions?

    • In theory it would force up interest rates. Unless the RBA pushed $26B in other denominations into circulation (which they would)

      • DarkMatterMEMBER

        So even if they replace it with smaller currency, a lot of that 27Bn would be linked with its owners? Do you think they would allow anonymous exchange for lower denomination bills, or would you need to identify yourself when trading the notes in? It seems to me that is a pretty crucial question.

  32. Any policy involving Kelly O dumb fuck is going to be shortsighted and lacking any logic whatsoever.

    She has to be dumbest of the dumb. Even dumber than sad excuse for a human being Dutton. F …. en pathetic.

    Just another diversionary summer/holiday time thought bubble to distract the predominantly moronic electorate from the real issues.

    Why does not some piss weak nancy boy lightweight excuse for a journalist ask her ….. Minister O dumb Fuck …’do you think this is an issue that is of paramount importance for our nation’.

    And pre empt her predictable reply with …..

    ‘Give the mass tax avoidance by large multinationals isn’t that where your attention should be focused’.

    She should be packing shelves at Coles.

    No problem here.

  33. Cmon MB, take the red pill! The banks (via dirty, paper or electronic fiat) own the govt and the media that owns the people.
    Our enemy is the banks and big govt.
    Bitcoin will kill the banks.
    Direct democracy (or One Nation) will kill big govt.

  34. DarkMatterMEMBER

    If you take 100 $100 bills and heatshrink them into a wad, you have a tradeable item. The basis of this is that the $10K wad has a value. You can exchange it for other things. The direction we are going is that the financial system doesn’t actually want anything to have intrinsic value. It wants everything to be a complex and abstract legal simulacrum of value. “Money” subject to -ve interest rates is effectively transient. It evaporates over time. That means that “value” becomes the first derivative of money. The transaction of money is where the value is, there is no intrinsic value in money – it evaporates over time. This is a paradigm shift that we really need to understand better before we jump in.

  35. 1. People earn more money than 20 years ago,
    2. India is a test case implemented by the 1%,
    3. Buy Gold & Silver in physical form while you still can.

  36. This isn’t a war on cash. More a war on money laundering and the no-tax black economy. Always hilarious to read the commentariat here. Hate chinese money. Hate foreign visa holders taking cash on the side of their stays. Bunch of knee jerks.
    Here is a moderate and not recent commentary about why high value notes are a Store if wealth for the dodgy. http://www.bbc.co.uk/news/business-35519884

  37. It’s all about the banks, it’s estimated that by removing $100 bills from circulation deposits at banks will rise 4%.

    Their is also a tonne of other reasons but I’d say given the current poor state of bank balance sheets……