Mr Holland, a web developer, secured a vote from hundreds of Liberal members opposing the reform at the party’s Victorian state council, triggering a letter to Treasurer Josh Frydenberg to respond to the concerns by February 17.
The minister in charge of the bill, Assistant Treasurer Michael Sukkar, has privately criticised the plan to his Liberal colleagues out of frustration that he inherited the proposal from the last term of Parliament.
“I know there is deep disquiet across the government on the merits of this bill,” one Liberal MP who declined to be named said on Friday. “There’s just no enthusiasm for it at all.”
While the Australian Tax Office wants to stamp out the “black economy” by curbing large cash payments, critics said the cost would be far greater than the benefits if Australians were banned from using more than $10,000 in cash.
Those speaking up against the bill include the Housing Industry Association, NSW Farmers, the Australian Dental Association and big retail groups that say customers like to save cash to make big payments.
“It is unclear what evidence exists to illustrate that limiting cash transactions to $10,000 will prevent tax avoidance and illegal activities,” NSW Farmers told the Treasurer last year.
There is a sense among party members and I think Liberal voters, that on this bill the party is not staying true to its Liberal values.
Victorian Liberal member Steve Holland
Flight Centre backed the changes in principle but said some of its customers liked to pay for holidays with cash after putting money away for months or years.
“Our ability to track [transactions] to meet the requirements of this regulation is a concern for us,” Flight Centre risk manager Brett Anderson told a Senate inquiry on January 30.
Treasury official Patrick Boneham told the Senate hearing of cases including a bikie gang that used $1.5 million in cash to buy 10 luxury cars so they could be sold to launder the money.
Economist John Adams, a former government official and adviser to Liberal ministers on deregulation, said the policy was at odds with the government’s own rhetoric.
“This policy is completely inconsistent with the thinking about how to deregulate an economy and promote not only economic freedom but robust economic outcomes,” Mr Adams told the Senate hearing.
Coalition MPs including Russell Broadbent, Barnaby Joyce, George Christensen and Patrick Conaghan spoke against the bill in a party room meeting last September.
The concerns have grown in recent months and the government is playing for time to reconsider the plan, moving on Thursday night in the Senate to postpone a report on the bill until February 28.
Labor senators Kimberley Kitching and Jenny McAllister have challenged Treasury over the change, given there is no formal regulation impact statement to quantify the costs and benefits. Labor voted for the bill in the lower house but is yet to decide its final position after the Senate review, raising the prospect of a defeat for the government if it proceeds.
Centre Alliance Senator Rex Patrick said the benefits of the cash ban were not clear but the problems were, including the likelihood that criminals would get around the restrictions while law-abiding Australians were inconvenienced.
“The balance lies against supporting the bill,” Senator Patrick said.
David Crowe is chief political correspondent for The Sydney Morning Herald and The Age.
Rob Harris is the National Affairs Editor for The Sydney Morning Herald and The Age, based at Parliament House in Canberra