The government has scrapped its controversial plan to ban cash payments over $10,000.
In the 2018-19 federal budget, the Morrison government announced it would limit cash payments that businesses can accept or make.
Company bosses could have faced two years in jail and fines of up to $25,200 if they breached the rule.
The government has scrapped its controversial plan to ban cash payments over $10,000
The law would still have allowed individual Aussies to make unlimited cash payments to each other, for example for buying a car on Gumtree.
The plan was recommended in 2017 by the government's black economy taskforce to tackle tax evasion and other criminal activities.
The government said there was clear evidence criminal gangs were using large cash purchases of cars, houses and jewellery to launder money from illegal activities.
But the bill met strong backlash from many Australians who felt the rule infringed their privacy and freedom.
On Thursday a vote moved by One Nation to scrap debate on the bill was unanimously passed in the senate before Assistant Treasurer Michael Sukkar then removed the bill.
He said: 'As we progress through to the recovery stage, we recognise now is not the time to impose an additional burden on small business.
In the 2018-19 federal budget, the Morrison government announced it would limit cash payments that businesses can accept or make
'The government is implementing a number of measures to tackle serious organised crime, as well as increasing the resources of the serious and organised crime program – a cross-agency program of work comprising the ATO, Commonwealth, state and territory policing, and other law enforcement agencies working to disrupt serious organised crime in Australia.'
Cash transactions over $10,000 must still be reported to government agency AUSTRAC.
One Nation Senator Malcolm Roberts, who moved the motion to scrap the bill said: 'This bill was never about tackling crime or money laundering, and instead criminalised the use of legal tender, cash, for everyday Australians.
'Australians now retain their right and freedom to use cash with the bill now officially dead'.