Government of India bold move on the ban of Rs 500 and Rs 1000 notes to catch black money holders and reduce terror funds had made a huge impact on Australia. Following the same strategy of India, Australia Government is also looking to ban $ 100 notes to crackdown black money. Moreover, ban on cash payments beyond a certain limit is also under consideration.
The Prime Minster of Australia Malcolm Turnbull has decided to set up a special task force to be headed by former KPMG global chairman Michael Andrew. The Government will review experience of France where Government is banning cash payments of over AU$1,400.
“There is nothing wrong with cash, the issue is when people don’t declare it. The whole point of this crackdown on the black money is to make sure we close down any possible dodges,” said financial services minister Kelly O’Dwyer.
She said, “The black money that goes oral amounts 1.5 percent of GDP ($21 billion). If we can get a percentage of that, it’s revenue unsettled to the Australian people. It is very critical for those people who are honest, decent people who are actually doing the right thing and paying their share of tax.”
On being asked about ban of $100 notes, Kelly said “I am not going to put a limit on what taskforce can look at.”
As per reports, currently nearly 300 million $100 notes are in rotation in Australia. The circulation of $100 notes have increased by more than 100 percent in over 20 years and 9 percent in the past year. While the long-term growth rate of $100 notes is 7 percent and it is 6 percent for $50 notes and 2 percent for $20 notes.
India’s Demonetisation status
As we know, on November 8, Prime Minister of India Narendra Modi announced the demonetisation of Rs 500 and Rs 1000 notes which extents nearly 85 percent of the notes in rotation. The Govt of India under Modi decision announced the ban of high denomination notes without any prior intimation. He didn’t give any time to black money holders to find any other solutions to turn the cash.
However, the overnight ceasing of Rs 500 and Rs 1000 notes put the people in more troubles, especially the poor and middle class people. Most of the citizens in India accepted the bold move took by Modi and standing in long queues at ATMs, Banks to deposit or withdraw their money. Few people and opposition parties blamed the Government by the sudden demonetization.
Now, Australia will also follow same strategy what India did and the Reserve bank official Peter Mair has also suggested the ban of $100 notes, giving a use-by date so that public can hand them over within the specified period of time or else they get nothing in return. He also stated that $100 notes are used in bulk for illegal activities and to avoid tax.