14 December 2016
Media Release
Black Economy Taskforce

Australians need to have confidence in our tax system.

Nothing makes fair minded Australians angrier than having to pay more tax as a result of someone else not paying the tax that they are supposed to pay.

That is why Turnbull Government has already acted to close loopholes for multinational tax avoidance, strengthened the powers of the Australian Taxation Office and doubled penalties on large companies that are ripping off the Australian taxpayer. In addition to our thin capitalisation changes and our announced new diverted profits tax, these changes make Australia one of the toughest countries in the world on multinational tax avoidance.

Our next efforts need to focus on the ‘black economy’.

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While there is no single, internationally-agreed definition, typically, the black economy refers to people who operate entirely outside the tax system or who are known to tax authorities but deliberately misreport their tax (and superannuation) obligations. The black economy can also include those engaged in organised crime, including those who engage in the production and sale of prohibited goods.

According to the ABS, it is estimated that the black economy in Australia could be as large as 1.5 per cent of our gross domestic product or around $24 billion dollars.

Black economy activities are both unfair for honest taxpayers and undermine our tax and welfare systems.

I am pleased to announce that the Turnbull Government has established a taskforce to crackdown on the black economy.

The Black Economy Taskforce, to be chaired by former chair of the B20 anti‑corruption taskforce, Mr Michael Andrew AO, will provide an interim report to Government in March 2017. Tackling the black economy requires a whole of government approach and participants will include the Reserve Bank of Australia, the Australian Federal Police, ASIC, APRA, AUSTRAC, and the Departments of Human Services and Immigration.

The Taskforce will look carefully at successful measures that have been employed overseas. Experience from both Australia and overseas shows that successful black economy strategies must avoid one-size-fits-all approaches, include a mix of both traditional tax enforcement and other tools and provide positive incentives as well as sanctions.

The Taskforce will provide a final report in October 2017 which will include an overarching whole of government policy framework and detailed proposals for action to counter the black economy.

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