News Pulse for May 14, 2018

A daily download of SME, startup, fintech and tax news from around Australia.

Australia Bans Cash For All Purchases Over $10,000 Starting July Of 2019

Australia’s Liberal Party government has announced that it will soon be illegal to purchase anything over $10,000 with cash. The government says it’s “encouraging the transition to a digital society” and cracking down on tax evasion. But not everyone is happy with the move.

“This will be bad news for criminal gangs, terrorists, and those who are just trying to cheat on their tax or get a discount for letting someone else cheat on their tax,” Treasurer Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15 said in a speech announcing the government’s new budget. “It’s not clever. It’s not OK. It’s a crime.”

Xero ambition gets analyst tick

Xero’s overseas expansion ambitions have been welcomed by analysts, as the cloud accounting software provider gears up to enter the Canadian and South African markets.

CLSA analyst Roger Samuel said that Xero (XRO) had already conclusively proved that it can successfully scale globally, with the company’s UK operations firing on all cylinders.

Cash flow’s king of SMB concerns

The 2018 federal budget, while ticking a lot of boxes for Australian small to medium businesses, has failed to address one critical issue for the sector, according to Tyro’s recently minted boss Robbie Cooke.

“The biggest positive for me was that there was a strong recognition by government of the importance of SMBs to the economy, which augurs well for the sector,” Mr Cooke said.

Support of open banking to “revolutionise” industry

The government’s support of open banking has been labelled a “sensible approach” by the industry.

A government statement said it will act to implement the recommendations in the final report of its independent review into open banking. The system will be phased in from July 2019, paving the way for the introduction of the government’s Consumer Data Right (CDR) in the banking sector.

Measures to tackle black economy are suspiciously totalitarian

The Turnbull government’s proposed ban on cash payments above $10,000 is a disturbing breach of our right to privacy, an attack on the basicAustralian Securities and Investments Commission (ASIC) is Australia’s corporate, markets and financial services regulator. asic.gov.au liberty of free exchange, and will worsen Australia’s red tape crisis.

Dodgy?

The aim of the ban, which was announced in the budget with other measures to tackle the “black economy”, is to prevent money laundering and tax cheats. These are genuine goals. However, there is nothing inherently immoral or harmful about cash. The government is punishing the vast majority who do nothing wrong in an ill-fated attempt to prevent a small number of people acting illegally.

Small Business Minister Craig Laundy: “People are slow to listen to government”

Small Business Minister Craig Laundy says as a businessman himself , he understands the priorities for smaller operators, but the challenge is getting them to listen to the government.

“People are slow to listen to government. A lot of them [businesses] say, ‘government should just get out of our way’, and when governments spread a message, there is an element of a trust deficit,” Laundy tells  SmartCompany .

Open banking may force down lending costs

Bank customers will be able to use their complete transaction histories from July 1 next year to get a better deal on savings accounts and credit cards in a gradual introduction of the open banking regime, which challengers say will put downward pressure on borrowing costs.

The government has accepted the banks’ argument for a phased-in approach to adding products to the regime, but has insisted on quicker timeframes than the banks had been arguing for. Treasurer Scott MorrisonThe Hon. Scott Morrison, Federal Member for Cook Treasurer from 21.9.15 described the establishment of the new regime as a “challenging but realistic timeframe” for the big banks.

Investigation into ATO in limbo, SMEs left hanging

A government-backed investigation into the tax office appears to have stalled, despite numerous accusations of ATO Australian Taxation Office bullying and heavy-handedness against SMEs prompting an initial flurry of action.

In April, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) revealed that it would join forces with Treasury and the Inspector-General of Taxation to investigate SME dealings with the ATO Australian Taxation Office , at the request of Minister for Revenue and Financial Services Kelly O’Dwyer.

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