There is an extraordinarily high number of $100 notes in circulation in Australia, and yet the green plastic is not a common sight. Former Reserve Bank official Peter Mair has suggested that the mysterious disappearance may be due to pensioners hoarding cash under their mattresses.
It may seem a far fetched conclusion, but Mair has offered some good arguments to support his claim. There are currently 10 $100 notes for every Australian, but only seven $20 notes, and the average value of notes held by each Australian is $2000.
Mair has suggested that pensioners are hoarding undeclared cash in $100 notes as a way to get around the means-testing for the Age Pension. When the question was put out to Australians via Neil Mitchell’s radio show on 3AW, callers reported storing more than $100,000 in their homes.
In order to curb this hoarding, Mair has suggested that the Government remove $50 and $100 notes from circulation.
Can’t believe the figures people claim to be holding onto in cash? Listen to Neil Mitchell’s show online and hear the phone calls for yourself.
I laughed when I read Mair’s thoughts on pensioners hoarding money, and after reading Finance Minister Penny Wong’s comment that she “had not been looking under pensioners’ beds lately”, I don’t think I was the only one. Not because I think he’s wrong—in fact, I’m sure there are a number of pensioners out there who have put some cash aside as a buffer for the hard times.
No, I had a giggle because Mair’s description conjured up images of evil pensioners sleeping with their noses brushing the ceiling due to the enormous wads of cash stashed under their mattresses. And we all know that simply isn’t true. In fact, I think those pensioners are pretty clever. If someone has paid a lifetime’s worth of taxes, only to find out that he or she can’t get the Age Pension because of a few thousand dollars, then who wouldn’t decide to store a little of the folding stuff?
When the pension increases enough that those living on the full Age Pension are no longer living below the recommended amount to eke out a moderate existence, I might frown upon those who try to work around the system. Until then, I think Mair’s comments about removing $100 and $50 notes from circulation are nothing but pettiness. Especially since I’m sure a former Reserve Bank official will not be suffering at the hands of the system any time soon.
Do you keep some undeclared cash aside, or is it wrong for those who have enough to pretend they don’t in order to pass the Age Pension means test?