Welcome and chair update
Co-chairs Dr Michael Schaper and Assistant Commissioner Peter Holt welcomed attendees. No conflicts of interest were declared by the members.
New members Laura Berger-Thomson, Department of Treasury, Kimberlee Stamatis, Australian Border Force and Simon Butt, Master Builders Association were introduced to the forum.
Deputy Commissioner Will Day was announced as the new co-chair as Deborah Jenkins has moved to a new role.
Members were reminded of confidentiality requirements associated with forum discussions. Should information be required for circulation outside this forum, members are to engage co-chairs who will ensure appropriately classified information is provided for dissemination.
It was noted that the members agreed to extend the tenure and membership of the forum by 12 months, until 30 June 2023.
Member updates
Industry members shared key observations which focussed on factors contributing to a highly challenging business environment. The discussion included:
- raising awareness of the shadow economy by focusing on the behaviour rather than the industry of those high-risk businesses
- cross agency communications and the reference to shadow or black economy (using different words to resonate depending on the industry)
- acknowledging that the terminology could be tailored to the industry and audience to identify the associated shadow economy behaviours
- the impacts of natural disasters and the ongoing pandemic on the mental wellbeing of small business owners and broader community
- businesses are struggling due to a lack of financial literacy
- people may be reluctant to re-engage with the tax system due to a fear of potential consequences
- the construction industry is facing labour and material shortages, including supply chain issues due to the pandemic and the war between Russia and Ukraine
- cash is being used by both employers and employees to avoid some obligations.
Action item |
20220809-01 |
Due date |
To be advised |
Responsibility |
Co-chair Dr Michael Schaper |
Action item details |
Circulate ‘In the Black’ article when available. |
Action item |
20220809-02 |
Due date |
November 2022 |
Responsibility |
Peter Holt |
Action item details |
Advise if the tax gap analysis can be used to develop regional messaging |
Environmental scan
It was noted that the current environment could result in some businesses shifting their behaviours towards the shadow economy.
Australia’s seasonally adjusted unemployment rate was at a record low of 3.5% in June 2022. The inflation rate has increased to 6.14% and the current Reserve Bank of Australia cash rate is 1.85%.
Members noted that the impacts of these issues vary across each sector so messaging needs to be tailored. It is important to communicate the right message for those who want to be honest and provide them with guidance.
Digital systems also have an impact. There is a reluctance, especially in older generations, to onboard new technology. Positive social media messages could engage with millions and target different industries. Communication should be limited to 3 messages at a time as this is more beneficial / easy to recall. The building and construction industry is one of the most reluctant industries to trust digital systems. This is being addressed by providing social media training and education on good business via apprenticeships and in-game messaging.
Members noted that direct messages at the right channels are beneficial towards nudging them to towards legitimacy.
Community research
The ATO conducted research before the COVID-19 pandemic to better understand the shadow economy behaviour, drivers, and demographics of the population. Members were asked to comment on another round of research.
It was noted that consumer behaviour has shifted away from cash over the last few years, but the value of Australian banknotes has increased (up nearly 20% since the start of the pandemic). Many view the cash economy as a victimless crime, with no harm caused or disadvantages to them.
Business and social peer groups can have the greatest influences on a community’s belief and behaviour in the cash economy.
Members noted the previous research and expected the same findings will result. They emphasised that it is the behaviour that needs to shift, and this will not change until cultural, technological or generational change eventuates and therefore it is vital to understand the moral reasoning behind the behaviour.
Agency updates
Geoff Francis, Assistant Secretary Treasury provided an update on the Sharing economy reporting regime and the ‘direction to educate’ legislation.
The legislation has now passed the House of Representatives and been introduced to the Senate.
Kimberlee Stamatis advised that on 1 June 2022 Hon Claire O’Neill was appointed as the Minister for Home Affairs. Hon Andrew Giles is the new Minister of Immigration. It was also noted that because of Machinery of Government changes, the Freedom from Modern Slavery policy now sits with the Attorney General’s Department.
Peter Holt advised the 4 year program of funding provided to the ATO to implement the recommendations included in the Black Economy Taskforce Report finished on 30 June 2022. The program raised additional liabilities of $3.8 billion. New measures to increase voluntary compliance and data and analytics profiling have improved the identification of participants and made it more difficult to participate in the shadow economy.
Action item |
20220809-03 |
Due date |
November 2022 |
Responsibility |
Peter Holt |
Action item details |
Share a status update on the new legislation with Elinor Kasapidis. |
Other business
Following on from the Shadow Economy Advisory Forum meeting in May 2022, Gavan Ord has offered to share some detail from the CPA annual Asia-Pacific survey of small to medium enterprise finances, including cash sales and the use of new payment technologies. Gavan is currently on leave and therefore it will be noted on the agenda for the next meeting.
Meeting closed at 3:45 pm.
Attendees
Organisation |
Attendees |
|---|---|
ATO |
Will Day (Co-chair), Small Business |
ATO |
Debra Goldfinch (Secretariat), Small Business |
ATO |
Katerina Bosevski (Secretariat), Small Business |
ATO |
Peter Holt, Small Business |
Australian Border Force |
Kimberlee Stamatis |
Australian Hairdressing Council |
Sandy Chong |
Australian Retailers Association |
Jason Robertson |
Australian Small Business and Family Enterprise Ombudsman |
Bruce Billson |
Chartered Accountants Australia and New Zealand |
Susan Franks |
Council of Small Business of Australia |
Peter Strong |
CPA Australia |
Elinor Kasapidis |
Independent |
Michael Schaper (Co-chair) |
Master Builders Association |
Simon Buttr |
Recruitment, Consulting and Staffing Association of Australia and New Zealand |
Charles Cameron |
Restaurant and Catering Industry Association |
Brendon Zhu |
Treasury |
Geoff Francis |
Treasury |
Laura Berger-Thomson |
Apologies
Organisation |
Member |
|---|---|
Australian Retailers Association |
Paul Zahra |
Restaurant and Catering Industry Association |
Belinda Clarke |