The shadow economy affects all Australians. It refers to legal and illegal economic activity that is not reported or taxed.
Although most people do the right thing, some people and businesses deliberately avoid paying the right amount of tax. Those who participate in the shadow economy reduce the funds available for essential community services, such as:
- health care, including Medicare and hospitals
- disaster response, for example, during bushfires, floods, droughts, public health emergencies
- education, including schools and teachers
- transport and infrastructure, including airports, roads and railways.
For details on how this affects everyone, see The shadow economy explained.
The ATO is committed to tackling the shadow economy and creating a level playing field – see The whole-of-government shadow economy action plan.
Those participating in the shadow economy continue to fuel it – regardless of the monetary value of the activity or whether they're a consumer, business or employee.
By doing the right thing, you can help protect Australia from the shadow economy and keep the system fair for everyone – see What you can do.