Australia is considering putting tiny identification chips in its $100 bills, as a measure against crime and “pensioners hoarding the money”.
‘Hi-Tech Nano Chips’ in $100 Bills
A brief video report from Channel Nine News said the $100 bills could soon include “hi-tech nano chips” so they can be traced. Other news outlets went into more detail, saying Australia’s cash economy is worth $40-50 billion AUD ($30-38 billion USD). It reportedly “costs” the Australian budget $10 billion AUD in revenue and $3 billion in welfare payments.
Bitsonline has reached out to the Australian Treasury department for further comment.
The Nine report quoted the head of Australia’s “Black Economy Taskforce” (a division of Treasury) as saying older Australians were hiding the notes to avoid the government benefits assets test.
Also, it added, Chinese tourists were taking physical cash home after visiting Australia “because they don’t trust their own banks”.
Elderly People Hoarding Cash to Fool Assets Test
Including old-age pensioners in the justification is an interesting twist. Previous comments from governments disparaging large-denomination bills have centered on crime and tax evasion.
Elderly Australians receiving government support are subject to an assets test to determine what they receive. A single home-owner can own up to $253,750 AUD ($194,000 USD) in assets and still receive a full pension. Married couples may own more, and their own home is not included in that amount.
However some people have taken to turning their larger assets into hard cash and hoarding it themselves, or “under the mattress” as the cliche goes.
Many comments on Nine News’ Facebook post were sympathetic to the elderly and cash-users:
Moves targeting the elderly and their benefits tend to be a tough sell in developed countries. That’s probably why the government highlighted the cash economy’s $3 million cost to welfare.
New Moves in the Global ‘War on Cash’
The move appears to be part of the “War on Cash“, an international effort by governments to discredit cash use. Focusing mainly on preventing organized crime and tax evasion, the campaign seeks to prepare the public for the elimination of large-denomination bills.
The Australian government announced in December it would “review” the $100 bill’s existence. Interestingly, the country’s central bank countered its claims, saying criminals actually prefer the $50.
Other countries have mused on similar reviews, and India has already taken drastic action to eliminate its larger bills (citing similar reasons). However it’s unlikely the U.S. has any plans to eliminate large bills at this stage.
Cash, Bitcoin and the Black Economy
The Australian Black Economy Taskforce’s terms of reference state:
“Activities that take place in the black economy reduce the amount of tax revenue governments are able to collect.1 The black economy undermines the integrity of our tax system, penalises taxpayers who do the right thing and, if unchecked, can foster a damaging culture of non-compliance in the community.”
Chipping bills would make cash technically “pseudonymous” like Bitcoin. However, since the bills would regularly pass through identifiable gateways like banks, it would be far easier to associate their value with a real name.
Is chipping large bills better than eliminating them? Or doesn’t it matter? Let’s hear your thoughts.
Images via Pixabay, KIIS1065 Australia, Facebook, Australian Treasury