AFTA UPDATE

I AM sure many of you who read this column each week might recall midway through last year, AFTA made mention of a new economy-wide cash payment limit of $10,000 to be introduced by the Federal Government.

Like most complicated things, governments are not good at educating and letting those who may be impacted by reforms of this nature know.

The new laws which will govern this change will come into effect 01 Jan.

The purpose of this legislation, we are told, is to attempt to control the “black” economy whereby consumers and businesses who trade in high levels of cash will have a much more robust reporting responsibility.

In the travel industry the term “cash” means many things to many people.

Not to be confused, and for those IATA agents in particular, BSP Cash has an entirely different meaning.

BSP Cash is an electronic transfer of funds; any form of electronic transfer is not covered by this new law.

For the avoidance of any doubt, the new laws will only apply to the real colourful folding stuff that we seem to have less and less of these days. Cash means Australian

(or other) currency used to purchase a good or service in the economy where the transaction or the combination of related transactions exceed $10,000.

In the context of a travel booking, where the total value of the trip hits $10,000 and the customer made several cash deposits to get to the total, this would be covered by the new law and reporting would be required.

We believe that cash is still used as a form of payment in the travel industry and very often the purchase exceeds $10,000 so travel will be caught up in this reform.

There is no avoiding this, no exemptions or other ways of changing this - those days have passed; the Government is now working towards implementation, enforcement and reporting.

Currently the Treasury is seeking feedback on the planned approach, and AFTA is taking part in this process in an attempt to not end up with an over-the-top, red tape-rich reporting system.

More detail about all this will come in the next month or two, but for those travel businesses who still enjoy having clients pay them with large sums of cash, you will have to be prepared for a range of new reporting responsibilities.

Stay tuned for the details as they become available.