Yahoo Finance The one product Aussies are still paying for with cash
You can tap-and-go for a coffee, a dress, your fuel and most other consumer items, but card payments for illicit drugs are not so simple.
New research from the Reserve Bank of Australia suggests 2 per cent of Australia’s bank notes – or A$1 billion – are used to purchase illicit drugs, with methamphetamine and cannabis the most common purchases.
The central bank estimates around $76 billion of Australian money is held in bank notes, and despite the shift to cashless transactions, this figure is still increasing.
This suggests we’re using cash as a means of storing wealth, rather than for transactions – unless you’re buying drugs, of course.
Another 3-5 per cent of bank notes are estimated as being used to conceal legal transactions and another 1 per cent to store profits from illegal activity.
That means criminals are storing a staggering $760 million in bank notes.
Drug raids by the Australian Federal Police suggest drug suppliers are often among those holding large volumes of cash, with the RBA putting this at $40 million to $1 billion.
Why does the RBA care?
The central bank explained the analysis is important to forecast future demand and also to monitor illegal transactions or tax avoidance.
Stunningly, of the $76 billion in bank notes, only 15-35 per cent is estimated to be used for legitimate transactions. Another 10 to 20 per cent is held by hoarders in Australia and up to another 15 per cent internationally.
The shadow economy, which includes the drug trade, accounts for 4-8 per cent of bank notes, and then 5-10 per cent of bank notes are just lost.
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