Surveillance

Australia Moves To Restrict Cash and Build Up Its Surveillance State

It’s all part of the international push by officials to monitor the public. You’re next.

|

Have you ever considered the data trail you leave as you swipe a card or make electronic payments for transactions over the course of your day? Australian officials have considered it, and they apparently think that trail of digital breadcrumbs is just an awesome step on the road to a surveillance state. The country is a Senate vote away from banning the use of cash for transactions of AU$10,000 and above.

It's all part of the international push by tax and regulatory officials to minimize the use of cash as part of the effort to monitor the publicand it's coming soon to a lawbook near you.

Australia's federal government isn't coy about the motivation for the bill restricting the use of cash. The 2017 Black Economy Taskforce Final Report, an inquiry into "activities which take place outside the tax and regulatory systems," including both legal (but off-the-books) and illegal transactions, argued:

For our purposes, an economy less reliant on cash could help counter the black economy. Electronic payments leave a footprint that cash transactions do not. That is why the latter are so attractive to criminals and those operating in the black economy. Not only is cash anonymous, but it can be used without leaving an obvious audit trail. In contrast, the more we move people into the digital payment world, the more visible, traceable and reportable their transactions can be. Digital payment can also be linked to identity, both individuals and businesses, which cash cannot.

In response to howls of outrage about the implications of the move for people's personal and financial privacy, the Reserve Bank of Australia (the country's central bank) insists that the pending law isn't about exerting control over the population through money. But the central bank's officials admit that they are "supportive of policy measures to combat the black economy." They also voice concern about the use of banknotes, fretting that only around one-quarter of them are used for buying and selling, with two-thirds or so held as a store of wealth, and others used for off-the-books activities.

Passed after much debate by the Australian Parliament's lower house, the bill is now held up in the Senate, where lawmakers are being bombarded by taxpayer advocates and small businesses with demands that they scuttle the measure.

The debate echoes similar discussions around the world, with the sides clearly drawn. Government officials and their allies in academia and finance openly argue that restricting or eliminating coins and currency will make it easier to monitor private activities and impose policy decisions.

Peter Bofinger, a former member of the German federal government's Council of Economic Experts, argues that "coins and banknotes are actually an anachronism" and impede the power of central banks.

"The big problem with paper currency is that a large part of it is used to facilitate tax evasion and a huge spectrum of criminal activities," insists Harvard University's Kenneth S. Rogoff, former chief economist of the International Monetary Fund and author of The Curse of Cash. "The government's right to tax, regulate and enforce laws trumps individual privacy considerations."

That casual across-the-board dismissal of privacy along with the enthusiasm for monitoring and controlling people's activities is an indicator that the war on cash is part of the larger push for state surveillance of all sorts of activities.

Sure enough, before the current move to cap cash transactions, Australia's government was already moving to monitor its population. For several years now, telecommunications companies have been required to store the metadata of Australians' mobile and online communications. The law "covers data on who called or texted whom and for how long, as well as location, volume of data exchanged, device information and email IP data. It also makes it much easier for authorities to access the records," notes the BBC.

In 2018, in the name of national security, the country adopted a controversial law that lets law enforcement and intelligence agencies force access to encrypted communications.

The Australian government has also taken to investigating journalists who reveal inconvenient information. One raid last year on the Australian Broadcasting corporation came in response to an embarrassing report that the country's soldiers had killed civilians in Afghanistan. Another, on NewsCorp reporter Annika Smethurst, ironically resulted from her story that authorities planned to vastly expand domestic surveillance.

"Under the plan, emails, bank records and text messages of Australians could be secretly accessed by digital spies without a trace, provided the Defence and Home Affairs ministers approved," Smethurst wrote in the article that the powers-that-be found so offensive.

No wonder that polls in Australia find people "increasingly concerned about expansion of surveillance powers."

So, limits on the use of cash should be seen in the context of a larger move toward tracking and monitoring people's daily work, activities, and communications. The bill being considered by Parliament specifically states that it is intended to "protect the integrity of the taxation law and other Commonwealth laws by ensuring that entities cannot avoid scrutiny."

All of this should sound very familiar to Americans who recently saw two warring political parties join hands in Congress to extend the domestic surveillance powers of the Patriot Act and to expand the snooping authority of the Department of Homeland Security. Just like their counterparts down under, American lawmakers are dedicated to ensuring that entities cannot avoid scrutiny.

In the financial realm, the use of cash assists people in evading such scrutiny—to the extent that German economist Lars Feld, rebutting his colleague Bofinger who was quoted above, calls it "printed freedom." He's certainly not the only one of his countrymen to feel that way; the use of physical banknotes remains extremely popular in Germany, largely because of its privacy-preserving power for people with harsh memories of life under totalitarian regimes.

"There is a hesitance to get rid of cash and there is a general suspicion among the German population that getting rid of cash is in some way, getting rid of a part of your freedom," according to Professor Dorothea Schäfer of the German Institute for Economic Research.

That sort of freedom is exactly what the pending law in Australia, and advocates of similar moves around the world, have in their crosshairs. This isn't a fight over taxes or law enforcement or money so much as it's a fight between the surveillance state and those who want to remain free.

NEXT: Today in Supreme Court History: February 6, 1858

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “coins and banknotes are actually an anachronism” and impede the power of central banks.

    Sounds like the ultimate reason to have cash, right there. Not that the Australians have any history of being treated as an entire country of felons, to learn these lessons from.

    1. Yeah, all the arguments against cash cited in the article sound like arguments for cash to me.

    2. This is news? There is a book that was written a little while ago, called the Bible. In the last chapter, Revelation, it is already detailed what happened now, but what is yet to come.
      So if you want to find out what is coming next, read the instruction on what to do about.

  2. To be clear: Never, ever, under any circumstance, vote for a left wing politician.
    Australia is reaping what they sowed at the ballot box.

    1. But they lie so well.

    2. +10000

    3. It blows my mind that article after article is about the woes and restrictions brought upon by the globalist left, and yet no one at this rag can come to terms with it. It’s always both sides. Somehow, because right wingers don’t want to pay for the welfare of illegal immigrants, or pay for abortions, there’s always a both sides.

      There will continue to be brexits and trumps to counter the left wing power grabs, and eventually Reason will have to come to terms with the fact that one side promotes individual liberty far more than the other.

      Probably not, Suderman would sooner vote for Bernie than admit he’s wrong

      1. It’s always both sides.

        Disagree. ‘Both sides’ is the nominal standard to which Reason occasionally rises. Some of the time the narrative isn’t even as contrived as “All animals are equal, but Republicans are less equal.” see ENB’s recent article on the war on porn. Lots of the time, the narrative is *slightly* more nuanced, “All animals are equal, but white elephants are exceptional, to be sure.”

      2. Well, the right-wingers have failed to stop this. So what good are they?
        I think that the “both sides” argument is often valid, but not because both sides are the same. There are clearly significant differences. But rather because both sides are part of the same thing and that thing is always moving in the left-wing progressive direction.
        It’s the right’s problem too because they are either willing participants, or highly ineffective in their opposition.

    4. The current government of Australia is a right-wing one.

      Which doesn’t change the fact that Australian’s are reaping what they sowed.

      1. The current prime minister of Australia is pretending to be an evangelical, arm waving christian. Photo ops of him in church do the rounds to prove he believes in …something.
        His actions totally belie his posturing.

    5. Nothing to do with politicians, they are just puppets that come in different flavors. They all are owned by the central bankers, the power that really controls them.

      Would be nice if the small people could see what the rich and powerful do with their money and watch them on camera as well.

  3. “Can I write a check for this suitcase full of cocaine?”

    “Sure, but I’ll need to see some ID.”

  4. Anyone with more than $10,000 in cash is up to no good.

    1. Anyone with more than $10,000 in cash is up to more no good – anybody with that much cash is already presumptively a crook. That’s the whole basis of asset forfeiture. And if you think the cops are bad on asset forfeiture, wait until the socialists gain control of the IRS.

    2. Anyone with less than $10,000 is structuring.

  5. The people behind this are the planners and technocrats Hayek was going on about in the Road to Serfdom and The Fatal Conceit.

    1. Every extension of government control works if you just put smart people you trust in charge, right?

  6. “The government’s right to …”

    OK, here’s thing one:

    Individuals have rights, organizations (including governments) have authority, based on the consent of the concerned individuals.

    1. Governments have power. Power and authority are not the same.

      1. You continue to prove you’re an imbecile lololl

        1. How is sarc’s comment imbecillic?

          If anything, your argument is with me since authority does not necessarily mean they have the power, and we all know that the police have the power to do lots of things that they have no authority to do.

      2. Yeah, no one ever asked for my consent to be governed.

        1. You signed a social contract in blood when you were born! Your soul belongs to society! Aaaauuughh!

    2. It is the theory of “equal application” that even has traction in the SCOTUS that if an duly enacted government policy on smarter 5he government has legitimate interest in is hampered by an individual right, then the proper action is to curtail the right.

      1. I do not disagree with your statement, but what happens to the concept of inalienable rights?

        This seems like more “living constitution” BS.

  7. “The government’s right to tax, regulate and enforce laws trumps individual privacy considerations.”

    Now do Roe v Wade.

    1. Two ways to cross a body of water are Roe or Wade.

  8. Clearly the problem is people having any money. All governments should switch to a Cuban style system where the government gets paid for you work and then gets to decide how much you get. Of course the woke betters will get their money first, followed by groupings from most intersectional to least, and the last to get paid will be the bitter clingers.

  9. How am I going to tip the valet? A couple pieces of hard candy?

    1. The $30/hr minimum wage means he isn’t dependent on tips.

    2. How am I going to tip the valet?

      Hand him a condom and tell him not to reproduce. *straightens tie*

  10. Libertarians need to get over reacting like Pavlov’s dogs and slobbering all over themselves in praise of technology. The problem with technology is today at least it usually involves replacing analog decentralized systems with digital centralized systems. The rise of the cashless society is probably the best example of this. A cashless society is an enormous enemy of freedom. The government can’t track and can’t keep you from spending the paper dollar in your pocket. It can do all of that and more to the electronic dollar in your bank account.

    Central planners and cops hate paper money. They want to ban paper money and replace it with an entirely electronic cashless society. That way they can take people’s money whenever they want to. They can track every transaction people make. And they can stop any transaction they don’t like.

    Screw that and screw them. Next to the right to keep and bear arms, the ability to hold and spend paper currency might be the most essential freedom we have.

    1. Technology itself isn’t the problem. Government’s use of technology for nefarious purposes is the problem.

      1. No, technology is the problem. The government is what it is. If it has a power, you can assume that it is going to use it and at some point abuse it. So, there is no way to separate the technology from the ways government will use it. One necessarily comes with the other.

        That doesn’t mean you say no to technology. It just means you understand what it means and you never let entirely replace older technology that the government has a more difficult time controlling. I am not saying get rid of electronic money. I am just saying never allow electronic money to entirely replace cash.

        1. I am just saying never allow electronic money to entirely replace cash.

          Well yeah. I’ve known religious people who would compare the end of cash to the mark of the beast. You could be effectively excluded from society with the flip of a switch. Sorry, account cancelled. Can’t work. Can’t get paid. Can’t pay rent. Can’t buy food. Good luck!

          I don’t think it will ever happen. Even if cash is outlawed, people will find something to use as currency. Cigarettes, bullets, whatever.

          1. It going to have to be whatever, since our betters are going to ban both cigarettes and bullets.

            1. If cash is banned, why wouldn’t it be replaced by something that’s banned?

              1. It will be. Governments are good at making lists of banned products, but not very good at actually carrying through.

        2. You two are arguing the same side of the question, aren’t you?

      2. Technology itself isn’t the problem. Government’s use of technology for nefarious purposes is the problem.

        Technology is part of the problem but his real criticism was blind optimism/utopian thinking.

    2. Dead wrong. Technology since the printing press at least has worked to decentralize information and power, and it is still doing so nowadays. Fifty years ago, there were only a few news sources, easily and willingly bamboozled by governments. Today governments and their lap dogs freak out over fake news because they can’t control news any more.

      Amazon is one web site. But businesses find it harder than ever to control markets.

      Look around. Decentralization is the trend, it has been for 500+ years, and technology is what makes it so.

      1. Today governments and their lap dogs freak out over fake news because they can’t control news any more.

        You realize that the/any controversy over fake news is itself fake news, right?

        1. No shit sherlock.

          1. OK. Because I don’t exactly agree with the rest of the sentiment but that seemed like a key faux pas.

            Sure, technology since the printing press has decentralized information but between public education, science as a credential, and fake news, the proliferation routinely gets reeled back in and it’s pretty much broadened power every bit as much as decentralize it.

            The most powerful man, or men, on Earth today, clearly have a much greater reach and, arguably, capacity for destruction than those at the time of the printing press.

    3. Technology in itself is neutral, its how technology is used. The same computer systems that allow the government to monitor millions of transactions from a bank’s database also allow cryptocurrency to exist without being able to be monitored

      1. allow cryptocurrency to exist without being able to be monitored

        Depending on which cryptocurrency, its existence is highly suspect and, independent of which cryptocurrency, it absolutely can be and likely is monitored.

  11. Sort’a like the gun-grabber’s mantra that if you have a gun (cash), sooner or later it’s predestined that you’ll use it criminally.

  12. This is concerning, but I need to hear more about what Orange Man Bad is doing to poor, dear Hunter Biden, which is the real risk to freedom.

  13. Now we have Garbage Continent for Australia along with Garbage Island for England.

    1. Australia is a garbage country full of garbage people. It should be banned for the sake of the children. Like Belgium.

  14. I’ve seen three news reports this morning, all with a common theme.

    1. Aussies banning cash

    2. Prudes banning porn

    3. Four Chinese phone makers creating their own app store because the US banned them from using Google’s app store

    The natural progression of any ban is already under way in all three cases to varying degrees. Porn has always been hiding from the banners. The Google ban is recent and very artificial, predicted at the time, and a harbinger of the war on trade too; most people understand that it is largely based on one person, Trump, but they also see that other politicians around the world are picking up on the populist nationalist idea, and at some point it’s going to be a lot harder to undo. The cash ban is a weird one. Not easy to get around, but there’s lots of expensive contraband to buy, and all that cash is going to find things to buy and ways to clean itself.

  15. the Reserve Bank of Australia (the country’s central bank) insists that the pending law isn’t about exerting control over the population through money.

    Uh, huh. What *does* the Bank insist the law is about?

  16. Back to using gold till the government bans that again. of course it would be hard to buy groceries with gold.

    1. Silver works well, and from the human lifetime standpoint, it’s almost as stable (chemically).

      Actually, gold bans are why some people like to buy bags of “junk” silver coins to keep in the root cellar. Thusfar, Ag coinage hasn’t been banned (but let’s not give them ideas).

  17. For our purposes, an economy less reliant on cash could help counter the black economy.

    Racist.

    1. No. They mean black as in illega… OK, I give up, racist it is.

      1. Expect to see not only gold and silver hoarding but a revival of bartering. No wonder the political class shits their pants over cryptocurrencies.

  18. Kenneth S. Rogoff, former chief economist of the International Monetary Fund and author of The Curse of Cash. “The government’s right to tax, regulate and enforce laws trumps individual privacy considerations.”

    all together now…

    FUCK OFF SLAVER

  19. Australia is the most southeastern province of China…

  20. They also voice concern about the use of banknotes, fretting that only around one-quarter of them are used for buying and selling, with two-thirds or so held as a store of wealth, and others used for off-the-books activities.
    SO MANY THINGS WRONG HERE!
    1)1/4 for buying and selling
    2/3 held (???)
    so 1/12 of banknotes are used for off-the-books activities. Obviously the point is not to stop criminal activity. It is to control people.
    2) Aren’t most, if not all, “off-the-books” activities ALSO buying and selling? In a real way, that is always what cash is used for. Whether it is buying/selling goods or services. The only question is do I want to spend the money now or later.

  21. Google pay 350$ reliably my last pay check was $45000 working 9 hours out of consistently on the web. My increasingly youthful kinfolk mate has been averaging 19k all through continuous months and he works around 24 hours reliably.=…. VIST THIS SITE >>. Read more

  22. I am making a good MONEY (500$ to 700$ / hr )online on my Ipad .Do not go to office.I do not claim to be others,I yoy will call yourself after doing this JOB,It’s a REAL job.Will be very lucky to refer to this…. Read more  

  23. Haven’t Christians been called fear mongers and tin foil hat conspiracy theorists for decades for their warning that governments would one day push for a cash-less society? Maybe they weren’t so crazy after all?

  24. GNU Taler allows purchasers to be anonymous while tracking how much
    money each store gets from sales. See taler.net.

Please to post comments

Comments are closed.