Tax guru and barrister Michael Andrew has outlined the controversial option, plus a proposal for an expiry date on the currency, to help fight organised crime and the cash-for-work economy.
In an exclusive interview with News Corp Australia, Mr Andrew, appointed by the Federal Government to the Black Economy Taskforce in December last year, revealed Chinese citizens were taking the Australian $100 note back to their homeland because they trusted Australian currency.
He also pointed the finger at Australian pensioners, saying too many were hiding money under their bed to escape the assets test.
Over the coming days, News Corp Australia will outline the challenges and some of the solutions to the estimated $40-50 billion cash economy, costing the Budget about $10 billion in revenue and $3 billion in welfare payments.
Mr Andrew, a former global head of KPMG and current Board of Taxation chairman, said there should be 14 $100 notes for every adult in Australia but there were fewer than that in circulation.
“You see a lot of Chinese don’t trust their banking system so they like to take Australian dollars back to China,’’ he said.
Crime gangs preferred $50 notes and foreign migrants the $100 note.
“I’m working with the Reserve Bank and Austrac to get a better understanding of where our notes are. Clearly there’s a section of this that is organised crime. One of the options we would have is putting an expiry date on these notes. You could put a trace on some of these notes to see where they would go. You can use nano technology to put little chips in so you could then trace it.”
He said there needed to be a cultural shift in Australia.
The community had to understand that hardworking Australians, who played by the rules, would be slapped with higher taxes to pay for the essential services the community expected if the problem was not addressed, he said.
That message is being directed at the young, Baby Boomers and pensioners.
“We’re seeing $100 notes used by pensioners because there’s an assets-based test at the moment and they like to keep a fair bit of cash under the bed.”
Mr Andrew’s final report is due in October.