How the budget is going to tackle Australia’s $50 billion black economy

iStock

The federal budget announced measures to fight the $50 billion black economy where cash is king and none of it ends up as tax dollars.

A multi-agency taskforce is being formed to share intelligence, create a mobile strike force and seek prosecutions.

The federal government is also banning electronic sales suppression tools which enable businesses to hide transactions.

And businesses must report payments to contractors in high risk industries, such as in the courier and cleaning industries.

Audit and compliance programs by the Australian tax Office (ATO) have been extended for a year to better target black economy risks.

“The black economy is also a source of funds for criminal behaviour, providing a facilitating role by creating a ready source of cash that can be funneled into illegal activity,” says Kelly O’Dwyer, the minister for revenue.

“The black economy is ever changing and will require ongoing action to effectively combat its growth.”

At the core of the anti-black economy program is faster, more accurate identification of businesses.

The government is now looking at ways to overhaul the multiple business registers across government.

Some of the registers rely on paper forms, involve manual processing and are not linked so that fraudulent behaviour is hard to detect.

The government is spending $19.3 million in 2018-19 to develop a detailed business case for a registry platform for modernised business registers at the Australian Business Register.

An economy-wide cash payment limit for large cash transactions of $10,000 is being introduced to reduce the ability of black economy to use cash to avoid tax obligations and launder the proceeds of crime.

An Illicit Tobacco Taskforce is also being created to investigate, prosecute and dismantle organised crime groups operating in illicit tobacco.

The taxing point of tobacco will also be moved to when it enters Australia to help starve the illegal tobacco market.

The latest program follows the recommendations of the Black Economy taskforce which reported to government late last year.

MORE FROM OUR FEDERAL BUDGET 2018 COVERAGE:

NOW WATCH: Tech Insider videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.