After India, now Australia plans to demonetise $100 bills to fight its black economy
Taking a cue from India, Australia may soon say goodbye to its $100 banknote. The country is mulling the abolition of its highest denomination currency, as the government may soon crack down on its tax evaders and the black economy at large.
“The whole point of this crackdown on the black economy is to make sure we close down any potential loopholes,” Kelly O’Dwyer, the Australian Revenue and Financial Services Minister told ABC radio in an interview, reports news.com.au.
She also noted how there are three times as many $100 bills as $5 bills in circulation. At present, there are 300 million $100 bills in circulation in Australia. 92 percent of the country’s currency is in $50 and $100 bills. However, since many of the country’s cash payments are untaxed, estimates suggest that Australia’s black economy accounts for almost 1.5 percent of the country's GDP.
UBS, the Swiss global financial services company, had earlier advocated for scrapping banknotes of the highest denomination in Australia. "Removing large denomination notes in Australia would be good for the economy and good for the banks,” UBS analysts had said, reported Bloomberg. This would also help increase household deposits and reduce crime and welfare fraud in Australia, UBS analysts noted.
India had scrapped its Rs 500 and Rs 1,000 banknotes early last month. This week, Venezuela too had scrapped its 100-bolivar currency leading to great chaos across the country.