By Dominic Powell and Eloise Keating
The size of Australia’s hidden or “black economy” is much greater than previously thought, according to the head of the federal government’s Black Economy Taskforce, who now estimates this part of the economy could be worth as much as $50 billion a year.
A previous estimate of $25 billion a year was based on figures from the Australian Bureau of Statistics, which calculated in 2012 that the “black economy” is worth 1.5% of Australia’s gross domestic product (GDP).
However, Michael Andrew, who is heading up the government’s efforts to tackle “black economy” activities, told The Australian he now believes the the scale of these activities is much greater. He’s formed this view after receiving further confidential briefings from government agencies and individuals in the time since he handed the taskforce’s interim report to the government in March.
“Since I put the report out, when I was saying the black economy was worth $25 billion, now I think it’s worth a minimum of $35 billion and could be as much as $50 billion,” he said.
“Briefings we have received on the illegal side of the black economy — the drug trade, money laundering — have led us to believe it is much larger than we first thought.
The taskforce is due to submit its final report to the government in October this year and Andrew said that report will have a particular focus on the “illegal component” of the “black economy”.
The federal government used the May budget to respond to a number of recommendations from the taskforce’s interim report, including introducing new compliance measures for cleaning and courier businesses that use contractors.
Banks can claim levy as tax expense
Prime Minister Malcolm Turnbull revealed in question time yesterday that Australia’s five largest banks will be able to claim the government’s new $6.2 billion levy as a tax deductible business expense, reports AAP.
It’s unclear what amount that will come to, but both Turnbull and Treasurer Scott Morrison claimed the government’s revenue forecast of $6.2 billion over four years from the levy was accurate. Fairfax reports four of the five banks that will pay the tax estimate a contribution of $1.38 billion annually, or $965 million after tax.
When the levy was announced in the federal budget earlier this month, Morrison said the tax would support smaller banks and encourage competition in the sector.
“This represents a fair contribution to the community from our major banks, is consistent with other advanced countries and helps foster competition from smaller banks,” he said at the time.
Trolley collector fined $30,000 for false records
A trolley collection business based in Wagga Wagga, New South Wales, and its former director have been fined a total of $29,500 by the Federal Circuit Court for providing false employee records to the Fair Work Ombudsman.
The company, Civic National Pty Ltd, provided trolley collection services to three large Woolworths supermarkets in the Wagga Wagga area. The Ombudsman conducted an audit of trolley collection businesses in 2014 and as part of this audit, ordered Civic National to provide employment records for its employees.
In a statement, the Ombudsman said the company’s former director provided false records, including records of a worker undertaking paid work when Department of Immigration records showed that worker to be overseas.
The Federal Circuit Court imposed penalties of $4500 for the former director and $25,000 for the business.
“We treat blatant record-keeping contraventions particularly seriously and we will not hesitate to take enforcement action against employers when we see this type of conduct,” Fair Work Ombudsman Natalie James said in a statement.
“While we appreciate bookkeeping for employers can seem complex, it is completely unacceptable for an employer to fail to keep accurate records of the hours their employees work and what they are paid.
SmartCompany was unable to contact Civic National Pty Ltd prior to publication.