The ATO has commissioned research by Colmar Brunton to look into consumer’s attitude towards ‘cash only’ businesses. The conclusions reached by the ATO on review of the research are available on the ATO website here:
The purpose of writing this newsletter is to bring a focus to the consumer’s right to use cash for transactions. In my opinion, the report provided to the ATO serve only as a self-indulgence by the ATO in formulating a continued argument against a consumer’s right to use cash. While the release briefly talks about consumer’s rights, it fails to deal with the underlying problem – businesses that neglect to declare their income for tax purposes. This should instead be the priority of the ATO; the correct collection of tax from business owners and taxpayers. If not managed correctly by the ATO these tax gaps disadvantage all taxpayers and results in honest taxpayers paying more than they should.
Initiatives of the ATO in connection with the black economy should be limited to dealing with the underlying incentives for the black economy i.e. the business owners, rather than developing a strategy to remove cash from society – which seems to be the undertones of Assistant Commissioner Matthew Bambrick’s comments in the ATO media release. It is my hope that that the ATO, and the government forces driving it, have a change of attitude in relation to the black economy and choose to deal with the underlying causes instead of penalising users of cash their ‘freedom of choice’, merely because of the actions of a few.
I have raised the issue of saving as an argument for the continuance of cash in the past by way of twitter. The connection between earnings and spending is diminishing among the younger generation due to the influence of debit/credit cards. This is the connection that cannot be denied when physical cash must be withdrawn from savings for the purpose of paying bills. As cash diminishes, the lowered capacity to pay future expenses can be easily identified and spending may be curbed appropriately. There have been recent examples of some young people earning in excess of $100,000 but who are unable to save. Lifestyle expenses surely contribute significantly to the inability to save, but these expenses are empowered by the disassociation between earnings, savings and spending.
I implore the ATO to reconsider their position on cash. It is a freedom of choice for consumers to use cash or credit for the purpose of entering into transactions. Denying the majority the right to use cash penalises them for the actions of a few. Instead, the tax office should focus their efforts on approaching cash-only or cash-focused businesses, dealing with the underlying attitude in relation to the declaration of correct income for tax purposes and ensuring they pay their fair share of tax.
For further information please contact our office.
Disclaimer: The contents herein are intended for general information only and should not be construed as legal or accounting advice. Vicca Chartered Accountants Brisbane bears no responsibility for any loss that might occur from reliance on information contained in this publication. Please do not reproduce, transmit or distribute the contents herein in any form without prior permission from Vicca Chartered Accountants, Taxation Accountants Brisbane Australia.
