Banning $100 notes? Brown paper bags? Burglar masks?

It really is the silly season. The government is thinking that it might be able to fix the budget deficit problem by abolishing $100 notes. Sure, this is an exaggeration, but it is at least looking into the issues of cracking down of the cash economy and crime with the humble $100 note in its sites. The inference is that the $100 notes facilitates crime and boosts the cash economy. There are a couple of points to note. The $100 note was introduced in 1984 and since then, the consumer price index has risen by 200.5 per cent. The purchasing power of the first $100 note has dropped to around $33.30 in today's dollar terms. $100 just doesn’t buy as much as it did 1984. If bank note issuance was to broadly track inflation, the government is behind the curve in issuing a $200 note. Even a $300 note.