Aussies who pay cash and don’t get receipt may soon be punished

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Grocery checkouts
Shoppers stand in a checkout line during Black Friday sales at a Target store in Culver City, California, US, November 25, 2016. Reuters/David McNew

One of 35 recommendations included in the interim report from the federal government’s Black Economy Taskforce has claimed the need for “consumer-focused action.” It plans to punish consumers who pay in cash and fail to get a receipt.

Board of Taxation chair Michael Andrew argued that while existing anti-black economy laws are centred on businesses, consumers are part of the problem. He talked about the plan to look at the merits of consumer focused sanctions.

These include warranties and legal rights for people who pay cash and do not get a valid receipt as well as loss of consumer protections. Andrew explained that it is part of a more comprehensive cultural change agenda, not just about inflicting new penalties.

Andrew added any new penalty regime has to be carefully calibrated with the strongest sanctions applying to egregious behaviour or repeat offences. “Lighter touch approaches (including ‘nudge’ techniques) will be more appropriate in many cases,” he wrote.

'Completely unfair'

Leading advocacy groups have slammed the plan, calling it “completely unfair.” The Consumer Action Law Centre and Choice and Financial Counselling Australia both warned in a joint submission to the inquiry that any such sanctions could lead to “significant consumer harm” and could have “serious economic consequences.”

Such a scheme, they said, could lead to a wicked incentive for businesses to operate in cash to strip consumers of their legal rights. They also described it a loophole that would be “contrary to the intention of legislators.”

“Broadly we support efforts to combat the black economy, because vulnerable or disadvantaged people are often victims, but we think punishing everyday Australians for businesses not complying with their obligations is completely unfair,” Consumer Action Law Centre senior policy officer Katherine Temple said, according to

The group also raised concerns with the effectiveness of the plan in altering consumer behaviour, saying it is widely known that consumers do not have a clear understanding of their rights. They argued there is not enough proof to conclude whether the plan is efficient in combating the black economy. Furthermore, the submission questioned the report’s recommendation for “whole-of-government” use of data to allow a more sophisticated use of analytics by government agencies.

Last month, Andrew suggested the idea of utilising nano-chips to monitor the “disappearing” $50 and $100 notes. The government said that avoiding tax through cash payments costs the budget up to $10 billion in revenue, an amount that was supposed to go towards funding welfare and other services.

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