MYOB predicts a future without cash to end Black Economy
21 May 2018
● Government Taskforce on Black Economy results welcomed by MYOB
● Federal Budget signals beginning of the end for cash payments
● MYOB calls for $1,000 cap on cash payments, phasing out of the $100 bill
MYOB, a leading provider of business management solutions in Australia, has praised the Black Economy Taskforce in their findings to combat the black economy.
“MYOB welcomes the recommendations outlined in the Government’s Black Economy Taskforce report. It’s great to see these recommendations leverage some of the good Government policy work already in place. One of the ways to tackle the black economy is to further promote a cashless economy, something we know Australian businesses on the whole are eager to embrace,” said MYOB CEO Tim Reed.
Federal Budget supports Black Economy Taskforce findings by ending large cash payments
The Black Economy Taskforce released the findings from its report last week in conjunction with the Federal Budget announcement that it will tackle large cash payments. The Government announced that cash payments can no longer be made for amounts over $10,000 in a bid to crack down on under the table transactions.
MYOB CEO Tim Reed said: “We have long argued in support of a shift to a cashless society. MYOB believes it would be simpler, cheaper and lower risk to start and run a business in Australia if we moved away from cash - it is a hidden expense and the cost of small businesses dealing with cash is material.
“We congratulate the Government on taking the lead in this area, starting with stopping large cash payments, and encourage them to take further steps. In fact, over time we would like to see the payment amount lowered to stamp out cash payments for amounts over $1,000.
“We also think it’s time to consider the usefulness and necessity of higher value notes and urge the Taskforce to consider phasing out the $100 dollar note.
“Embracing the cashless economy faster will deliver positive returns for citizens and ensure that Australian businesses have the opportunity to compete on an equal playing field.”
The Black Economy: not a “victimless crime”
The Black Economy Taskforce found that the black economy was a cultural problem that was supported by values and assumption from the community that it is a “victimless crime” and “everyone does it”.
MYOB CEO Tim Reed strongly rejected this attitude, arguing: “The cash economy adversely affects honest businesses, consumers, employees, the integrity of our tax system, authority of our key financial institutions and our economy.
“The black economy is estimated to be valued at approximately $25 billion. With this amount of business being done ‘off the books’ it creates an uneven playing field and penalises those individuals and businesses who do the right thing. It is certainly not a victimless crime.”
The answer is not more regulation, but digitisation
The Black Economy Taskforce found that greater regulation was not the answer to end the thriving black economy in Australia, instead recommending the employment of smart technologies that can automate and digitise transactions and processing.
Innovations such as the New Payments Platform (NPP) mean that transactions are getting quicker, safer, and more efficient.
Mr Reed said: “What is clear is that the future for businesses is online. The Government’s focus on digital initiatives, including integrated online systems to enable digital reporting, mean that it’s more important than ever for Australian businesses to be using an online software provider.
“This serves two purposes: it reduces red tape and administrative burden, but also improves transparency of transactions and allows Governments to better regulate the black economy.”
“Another example of the trend towards digitization was the launch of Single Touch Payroll (STP), announced at last year’s Federal Budget. STP becomes mandatory for businesses with 20 or more employees on 1 July this year and for businesses under 20 employees from 1 July 2019.
“This new legislated reporting change requires employers to report salaries and wages, PAYG withholding and super information electronically through the ATO every pay run, not just once a year,” said Mr Reed.
“Businesses need to be across this key change. MYOB has been working closely with the ATO on this initiative and I’m pleased to say that MYOB’s payroll software will be compliant prior to the reporting date and will deliver an easy-to-use solution, making this transition as smooth as possible.”
MYOB commits to ending black economy
“We know from early findings of the Taskforce that low wage growth, pressure on business margins, regulatory burdens and the expanding sharing economy likely strengthen incentives to take part in the cash economy.
“I call upon the business community, state, territory and local governments and the public to play a role in tackling the issue. If we want an even playing field, let’s start by modernising our payment system and shifting our perception that taking part in cash economy does little harm. I call on you do your part, and I commit myself and the MYOB team to doing ours,” said Mr Reed.
For further comment or other information please contact:
Selina Ife, MYOB
M: 0488 044 237/ E: Selina.Ife@myob.com
Kate Dinon, Character
M: 0487 328 738 / E: firstname.lastname@example.org
MYOB Group Ltd (ASX: MYO) is a leading provider of online business management solutions. It makes business life easier for approximately 1.2 million businesses and accountants across Australia and New Zealand by simplifying accounting, payroll, tax, practice management, CRM, job costing, inventory and more. MYOB operates across three core segments – Clients and Partners (business solutions to SMEs and Advisers); Enterprise Solutions (larger businesses) and Payment Solutions. It provides ongoing support through client service channels including a network of over 40,000 accountants, bookkeepers and other consultants. It is committed to ongoing innovation, particularly through its Connected Practice Strategy and through the development of the MYOB Platform. For more information, visit http://investors.myob.com.au/Investors or follow @MYOB on Twitter