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Why the Australian $100 note is doomed


Our biggest bill is likely to disappear in a crime crackdown.

If I use an ATM and it spits out $100 notes, it's always annoying. There's something unavoidably awkward about someone behind the counter having to hand over $95 in change the next time I pay for something. But at the rate things are going, I may not have to put up with that hassle for too much longer.

The Federal Government has announced a new "Black Economy Taskforce", which will examine the extent of tax avoidance, especially by criminals, and measures which can be taken to reduce its size. One strategy that's apparently on the table? Getting rid of the $100 note, which provides a portable form of money which allows large sums to be transferred effectively without trace.

"We've got three times as many $100 notes in circulation as $5 notes and we've got about $30 billion worth of $100 notes in circulation at a time when increasingly we have people more and more using electronic payment systems," Minister for Revenue and Financial Services Kelly O'Dwyer told media at the announcement of the taskforce. "The truth is the movement of money is a significant issue. It's much easier to take a suitcase full of $100 bills than a suitcase full of $20 bills overseas."

A key inspiration for the concept appears to have been a paper by Harvard economist Peter Sands, which makes the same basic point:

High denomination notes are arguably an anachronism in a modern economy given the availability and effectiveness of electronic payment alternatives. They play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy. The irony is that they are provided to criminals by the state.

That certainly chimes with our rapidly decreasing use of cash and our enthusiasm for contactless payments.

The initial report from the taskforce is due in March 2017, with a final set of recommendations in October. In the meantime, there's one thing we can all agree on: the five cent coin has got to go.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on

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