Australia catches the demonetisation bug: May abolish 100 dollar note

Australia is considering abolishing $100 notes in a bid to crack down on the “black economy”, said media reports on Thursday.

Kelly O’Dwyer, revenue and Financial services minister, told a news website the government is considering a review of the $100 note and cash payments over certain limits to recoup billions in unpaid tax. $100 is the country’s highest-denomination banknote.

The currency could be abolished when the government announces a midyear budget update on Monday. The update will include the appointment of former KPMG global chairman Michael Andrew to oversee a black economy taskforce. Black economy accounts for 1.5% of Australia’s GDP, estimates say.

According to reports, Australia currently has 300 million $100 notes in circulation, and 92% of all currency by value is in $50 and $100 notes.

However, Liberal Democratic senator David Leyonhjelm has rejected the proposal saying “the only people who are distressed by the cash economy are the government and the public servants who want to spend taxes”.

India last month demonetised the country’s two highest-denomination banknotes in a bid to crack down on “black money”, sparking chaos across the country.

Prime Minister Narendra Modi sent shockwaves through the country by announcing on November 8 all Rs 500 and Rs 1000 notes--some 85% of all legal tender in circulation--will be abolished in an effort to counter “black money”.

Venezuela joined suit this week, with President Nicolas Maduro said he was abolishing 100-bolivar bills, the nation’s highest currency denomination in an attempt to fight speculation and currency hoarding.