$500 slug for small businesses in anti-money laundering scheme

Going to the local newsagent to transfer money overseas could become a thing of the past if a little-known federal government proposal goes ahead, it has been claimed.

Newsagents, along with the likes of jewellers and real estate agents, are among a wide range of small businesses who will be forced to pay a $500 annual fee to help combat money-laundering, under proposals being considered by the government.

As part of the Anti-Money Laundering and Counter-Terrorism Financing Act, businesses registered with the Australian Transaction Reports and Analysis Centre, better known as AUSTRAC, would be required to pay the money, which would go towards IT system upgrades and an organised crime body within the Australian Crime Commission.

The fee, which would commence in July 2011, was outlined in the recent federal budget.

Accounting body CPA Australia said the charge would affect all small businesses, including accountants, but not those who it targeted, and added to an already onerous anti-money laundering burden.

General manager of policy and research Paul Drum said: "Is this going to be a case of those who are compliant and have nothing to hide will be forced into a regulatory regime and will have to register, while those who have something to hide, won't?".

"It's another charge on small business. Accountants are usually small businesses too and, since it's a flat fee, a sole partnership in the suburbs will have to pay the same amount as one of the big four firms."

The original proposal was mainly aimed at banks and deposit-taking institutions but now covered the likes of lawyers, real estate agents, jewellers, financial planners, accountants and newsagencies, Mr Drum said.

Federal opposition small business spokesman Bruce Billson said the fee was "yet another obstacle" the government had put in the way of small business, but which would save it $90 million in the next three years.

"Small business will not only be impacted by the flat fee, they will incur compliance costs such as training and compliance reporting and changing their systems relating to the regime," he said.

Some small operators, such as newsagents who operated wire transfer services, would probably stop providing those facilities because it would not be economically viable to do so, Mr Billson said.

"The Rudd government continues to impose new financial and regulatory burdens on small business and this is just another impost on the engine room of the Australian economy."

A spokeswoman for Home Affairs Minister Brendan O'Connor said consultation with affected businesses was "underway".

All entities required to report to AUSTRAC would be required to pay the fee.

It was aimed at those who made money out of transferring money overseas and regularly dealt with more than $10,000 in a single transaction.

More than 15,000 of the 16,500 businesses registered with AUSTRAC would "only" pay the $500 fee, the spokeswoman said.