The Black Economy Taskforce has released a discussion paper outlining a number of additional policy ideas which draw on its recent public and stakeholder consultations. It asks for responses quickly, by 14 August 2017.
The 54 ideas outlined in the Taskforce’s paper are said not to be recommendations, but intended for public comment and reaction. The feedback the Taskforce receives on them will help it to finalise its Final Report, due in October.
The particular areas of focus are said to be individual identity, the abuse of the ABN system, phoenixing, the need for stronger enforcement action and visibility, the use of electronic payment systems, dealing with criminal elements of the black economy and industry specific problems including tobacco, horticulture, certain segments of the labour hire, and security industries.
It might be pointed out that these are all at the smaller end of the tax system, significant though the issue is, and not only for financial reasons. The Senate committee inquiry into corporate tax avoidance presents another aspect of tax avoidance. Its inquiry started in October 2014. It is now to report three years later, by 30 September 2017. And they will of course only be recommendations. The Black Economy report will need to at least consider the Senate recommendations.
Two things might be said
One, while ever the government resists, and is seen to resist, any fundamental review of the tax system, and the 2010 Henry tax review is a prime example, a culture of disregard for tax payments and compliance might well exist and develop. As with any crime, its management and prevention lies less in its enforcement as in addressing the underlying conditions supporting it.
Two, in the particular area of phoenixing, the government has shown little enthusiasm for addressing those underlying issues, for example in its apparent rejection of the need for director identity numbers and extraction of tax payments through single touch payroll. The need for a change in culture about tax payments, that the discussion paper refers to, might well extend to the political culture of avoiding hard decisions in favour of the populist.
The 54 ideas are nevertheless commended for consideration and responses.