This estimate included a wide array of activities including underpaying wages or paying for work cash-in-hand, under-reporting income, sham contracting, phoenixing, identity fraud, ABN and GST fraud, illicit tobacco, money laundering, unregulated gambling, criminal acts, counterfeit goods and illegal drugs.
Business lobbies including CPA Australia and the Australian Chamber of Commerce and Industry (ACCI) have previously said there is no legitimate evidence that the law will stop black economy activity, and in fact, it may actually result in more sophisticated cash economy activity .
The law does not currently capture digital currencies such as Bitcoin.
Dr Richards said this could result in a shift towards cryptocurrencies "if an entity is currently transacting in cash for nefarious reasons and decides that it's no longer going to use cash". AUSTRAC says bill will help fight money laundering
AUSTRAC told the inquiry it also supported the proposed law, saying a $10,000 cash payment limit would be "a very useful measure that will help address a money-laundering risk to the economy".
"It is about targeting the money-laundering risk associated with cash," said AUSTRAC's general counsel Kathryn Haigh. Experts have slammed a Treasury proposal to reverse the onus of proof for black economy crimes.
While the law does state that if a bank customer deposits physical currency of $10,000 or more the financial institution has to report it to AUSTRAC, she said the authority did not currently regulate transactions by high-value dealers.
"If someone is purchasing or selling a high value good—such as jewellery, art, antiques and luxury cars—that would not be something that they would be required, by using cash, to report to AUSTRAC," Ms Haigh said.
The Uniting Church's Mark Zirnsak told the Senate hearing that his organisation was supportive of the cash bill, with a number of countries overseas already successfully implementing cash limits.
He said the proposed law change would deter real estate agents and high-value cash dealers from accepting dirty money for big purchases such as houses and jewellery.
He said "former employees in the real estate area" the organisation had spoken to had alleged some firms sent people to China "in order to encourage clients in China to invest in properties here in Australia, no questions asked".
"Sometimes they would suspect the source of the money was not legitimate," Mr Zirnsak said.
"They would accept very large cash transactions from Chinese clients to purchase properties here in Australia, and there is no requirement for a real estate agent to report any suspicious transactions."
If the law is passed, he said the Government should provide assistance to people with mental health issues and older people who have may difficulty accessing the financial system. Law Council fears 'unintended consequences'
But the Law Council of Australia's Andrew Ham told the Senate hearing the proposed law could result in "unintended consequences".
The law establishes a criminal offence of strict liability for anyone who gives or receives a cash payment that equals or exceeds the cash payment limit of $10,000. The RBA says cash will become a niche payment sooner than we think, as the Government considers imposing tougher penalties on cash economy activity.
"In retail and wholesale businesses, they would be the people who are dealing with customers," Mr Ham said.
"Many of those people are minimally paid, minimally trained and minimally engaged with their workplace. They might be casual or part-time and they might be 16 years old.
"Under this bill, all that has to happen is that someone … wants to give them [the retailer] $10,000 to pay for something … and that person [the retail worker] is potentially heading to jail. That disturbs me greatly."
Also opposing the proposed law was the Australian Taxpayers Alliance's executive director Brian Marlow.
Mr Marlow, who is also the director of Legalise Vaping Australia, told the hearing he had heard from vape shops (selling electronic cigarettes), adult shops and people in the sex industry who were worried about the bill passing because they were reliant on cash payments as some banks would not work with them.
"The feedback I've had from vape shop owners is that even smaller banks are now not working with them," Mr Marlow said.
"In Victoria, I know that legal sex work operations found that they weren't able to trade with certain banking providers and things like that," he said, adding he did not have specific examples but would take it on notice and send that to the committee.
The Senate inquiry into the proposed law is due to hand down its report by February 7, but there will be further public hearings before then....