Not cashed up but hardly cashless

The latest Reserve Bank figures show our holdings of plastic notes grew an extraordinary 7 per cent in the year to June, at a time when Australia's population grew 1.4 per cent.

Australians now hold an average of seven $5 notes per person, up from five a decade ago, and five $10 notes, up from four. Our holdings of $20 notes are little changed at seven per person.

The explosive growth is in the holdings of $50 notes - up from 15 per person to 23 per person - and $100 notes, up from seven per person to 10.

So much do the big-value notes dominate that the Reserve Bank says $50 and $100 notes account for 91 per cent of the value of notes in circulation and 65 per cent of the number of notes in tills, wallets and in storage. Yet many Australians hardly ever see a $100 note and probably see a $20 note more often than the three-times-as-popular yellow $50.

One reason might be that many of the yellow notes are stored in automatic teller machines, where they have replaced the $20 note as the main means of supplying cash. Another might be that many of the green $100 notes are stored in bundles in boxes or suitcases as means of facilitating the cash economy rather than put into wallets for use in legitimate transactions.

If so, the cash economy is growing at an alarming rate. Before the introduction of the goods and services tax in 2000, there were roughly half as many $100 notes per person as there are today.

Backing the theory that the extra $100 notes are kept in bundles rather than put into wallets are Reserve Bank estimates that the average $20 note lasts 12 years before being damaged and replaced whereas the average $100 note is on track to last 70 years. The $50 note is by far the most counterfeited, with almost 7000 fake notes detected in the year to June.

The annual report shows the number of counterfeits dived in 2011-12 after the arrest in 2010 of several people allegedly connected to a criminal operation in NSW.