The Senate committee has attracted more than 130 submissions, with most from individuals angry at what they argue is a direct assault on their ability to manage money.
But a number of business organisations and individual companies have also raised concerns about how the clampdown on cash will work in practice.
Australian Funeral Directors Association (AFDA) president Andrew Pinder said the ban would have a major impact on elderly Australians who often put money aside for their funeral.
“AFDA is of the opinion the proposed laws will operate harshly on the elderly and in AFDA’s experience the elderly migrant community in particular,” he said.
Online marketplace company Gumtree warned that despite an exclusion for consumer-to-consumer transactions worth more than $10,000, the proposed law could still have a negative economic impact.
The firm’s head of government policy, Luke Aitken, said if the Reserve Bank took interest rates even lower than the current 0.75 per cent, more people were likely to get caught up in the government’s restrictions.
“In economic circumstances where Australia faces negative interest rates, there is potential that some consumers will look to hold and transact with cash more frequently,” he said.
The Housing Industry Association said the law was more bureaucratic red tape that would have “little effect on tax leakage and illicit activities associated with large cash payments”.
Flight Centre said while it was supportive of the government’s general thrust, the penalties – fines of $25,200 per offence and jail terms of up to two years – were too harsh while the policing of the new law would prove difficult.
It warned it was unlikely it could be in a position to implement the new laws by the end of the year, saying the government should delay the proposals for a year.
But not all want to ditch or delay the planned laws.
The Victorian and Tasmanian synod of the Uniting Church has urged the committee to ensure there is a review in three years to see if the $10,000 threshold can be reduced. It also believes there should be no exemption of digital currencies and argues the government not exclude private and personal payments from the laws.
“This will open a loophole for money laundering activities, allowing criminals to “gift” the proceeds of crime to associates,” it said.
The Senate committee is due to report by early February.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.