2025 deep dive workshops - Key insights and phase 1 solution mapping
A summary of the 3 deep dive workshops conducted in 2024 was presented, covering manipulating employment relationships, digital shadow economy behaviours, and reporting and data controls.
The key insights and potential strategies derived from these workshops were presented to understand and address the drivers of prevalent shadow economy behaviours. Additional phase 1 updates were shown on the progress of implementing the proposed strategies to tackle these drivers.
Bastion research findings
The findings from the 2024 Bastion research were presented, which explored community beliefs, values and attitudes towards the shadow economy, particularly post-pandemic.
The research examined factors influencing the tolerance and reporting of shadow economy activities, the impact of digital money and cryptocurrency on the shadow economy and identified potential actionable strategies to improve compliance.
Members shared their insights aligning with the Bastion research findings, focusing on various aspects including illicit activities, the consideration of behavioural economics, suggested ways to improve communication strategies, and concerns related to administrative challenges.
Treasury updates on shadow economy
Treasury provided an update on work associated with the shadow economy:
- The 2017 Taskforce Report established a framework for addressing the shadow economy in Australia.
- Despite significant changes in Australia since 2017, the fundamental drivers of shadow economy behaviours remain unchanged.
- Technological advancements have introduced new challenges through digital platforms and simplified money movement. Addressing illicit activities, particularly those involving tobacco, is crucial to prevent escalation.
Agency updates
Treasury
Treasury provided an update on the consultation regarding the cash mandate for the upcoming year.
Australian Border Force
Australian Border Force (ABF) discussed the implementation of recommendations from the Nixon review. Key developments include the establishment of an Immigration Compliance Operations Division, and an Immigration Compliance Group, within the Department of Home Affairs. ABF also discussed the introduction of additional measures under the Strengthening Employer Compliance legislation effective from 1 July 2024.
Australian Taxation Office
The Australian Taxation Office (ATO) updated the forum with matters relating to the Shadow Economy Program including:
- For July to September 2024 the program has undertaken more than 79,800 activities, raising almost $693 million in liabilities.
- Level Playing Field referrals cases have produced liability outcomes of $12.3 million, exceeding the financial year plan of $7 million.
- Current efforts involve addressing overstated pay as you go claims, with the potential to significantly increase the Shadow Economy deliverables subject to the scale of required treatment.
- The Shadow Economy Taskforce has made 35 disclosures to member agencies including 41 community tip-offs, in line with the Memorandum of Understanding and Regulations.
Member updates
Industry members shared their key observations and provided updates on various industries, highlighting the challenges faced by small businesses including:
- the need for good business practices and navigating the complexity of workplace relations
- challenges in building and construction industry, marked by high insolvency rate and ongoing difficulties, with reference to the Construction, Forestry and Maritime Employees Union.
- financial pressures on small businesses, including struggles to pay bills and taxes, with some accountants reporting cases of domestic violence, vulnerability of spouses and financial abuse
- the growing regulatory burden on small businesses and tax agents, including surcharges, over-regulation, and duplication of legislation, leading to culling of client lists due to compliance complexity and costs
- a soft recruitment market, the emergence of new non-ICP or contractor roles, and collaboration with the New Zealand Government on migrant worker initiatives.
Other business
The co-chair outlined upcoming activities and governance plans consisting of:
- a presentation by Dr Schaper and Tony Goding to the Council of Small Business Organisations Australia roundtable scheduled for mid-December 2024
- seeking suggestions from members of potential focus areas for 2025
- encouraging collaboration to enhance community messaging based on Bastion Research Insight
- placeholder meeting dates and potential focus areas to be advised in early 2025.
Members were thanked for their efforts and contributions in 2024.