The interim report of the Black Economy Taskforce is a timely and important step in the fight against the black economy in Australia.
Black economy activities disproportionately affect the most vulnerable in our community. Participation in the black economy undermines the community’s trust in the tax system, creates an uneven playing field for business, fosters the exploitation of workers, and results in lost government revenue and undue welfare expenses.
The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP, established the Black Economy Taskforce in December 2016 to develop a whole-of‑government response to tackle the black economy.
Following extensive consultation with business, community and government representatives, independent Chair of the Taskforce, Mr Michael Andrew AO, delivered his interim report to Government.
The Government has accepted the recommendations identified for immediate action:
- Extending the Taxable Payment Reporting system (TPRS) to two high-risk industries – cleaning and couriers – to ensure payments made to contractors in these sectors are reported to the ATO. The TPRS has already improved tax compliance in the building and construction industry.
- Banning the manufacture, distribution, possession, use or sale of sales suppression technology. This technology allows businesses to understate their income, and has been identified as a threat to the integrity of the tax system both in Australia and internationally.
- Providing funding for the ATO audit and lodgement activities to better target black economy risks.
These measures will improve fairness for businesses, level the playing field and strengthen the integrity of our tax system, resulting in a net gain to the budget of $632 million.
In addition, the Government has agreed to the Taskforce’s recommendation that Government procurement processes encourage good tax behaviour. The Taskforce will develop a proposal in conjunction with the Department of Finance and other Commonwealth agencies for the 2017-18 Mid-year Economic and Fiscal Outlook.
The Taskforce will continue to consult widely with the community over the next few months. The public are invited to make submissions on the Treasury website. The closing date for submissions is 30 June 2017.