Australia’s shadow economy leeches $12.4bn from tax revenue amid Treasury’s failure to crack down

Auditor general’s report says bid to tackle cash-in-hand work and tax avoidance measures haven’t worked

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Treasury has failed to effectively tackle the shadow economy, which leeches $12.4bn in tax from Australia, and “paused” work on it during the Covid pandemic, an auditor general’s report has found.

The shadow – or black – economy refers to dishonest or criminal activities operating outside the tax system and can include illicit tobacco dealing, money laundering, underpayment of wages, unregulated gambling and motor vehicle fraud.

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