With the Abbott Government claiming an economic disaster is at hand unless its budget measures are passed by The Senate, predominantly much of what is being blocked is the government’s savings proposals along with some of its revenue raising ideas, estimated at $3.5 billion.
The finance minister Mathias Cormann has tried to up the ante by claiming that “Inevitably taxes will have to go up if spending cuts are not approved”. But do they? Given the rampant untaxed cash economy that exists in Australia. Is there an economic crises, would taxes have to go up as Cormann has claimed?
We all have had experience with the cash economy, even if it’s nothing more than a local tradie offering less for cash with no receipt. No GST, no income tax, no nothing to the government. Some will say that is just good business, no its not, that is just criminal.
How extensive is the crimes of the cash economy in Australia. It is estimated 275,000 businesses large and small engage in the cash economy. As far back as 2012 the Australia Institute said the cash economy was costing state governments alone $2.7 billion, add to this billions lost by the federal government from GST, income tax and other taxes and charges, then the figure is astronomical. If people like. Mathias Cormann were serious about an economic crises they would stop turning a blind eye to their mates in business and do something about this billion dollar rip off

Yes totally agree. I can't see why every business can't have a business account on the internet with every transaction having to be registered through that account and the person given a receipt for the transaction. If no receipt from that account is issued to the buyer, then the buyer could have the option of reporting it to the tax department with an automatic $10000 fine to the business and a reward to the buyer. Thus the tax department would a least have a very good idea of the gross takings of every business.
Around 20 years ago I heard a PhD student on the radio talking about this topic. They estimated at least half of all business did not declare around 30% of their income, mostly from migrant backgrounds from countries where people did not trust authorities.

It is an interesting conundrum indeed, Paul1405. And it poses a dilemma for us all - what should our own role be in the process?

When a tradesman says "that'll be five hundred for cash", what should be our response?

If you ask for a formal quote, chances are it will be substantially higher. But if you just say "great, it's a deal", are you a willing accomplice to tax avoidance, or merely a thrifty citizen? After all, paying cash is not in itself a crime.

The size of a country's cash economy is often related to the overall fairness of its tax system, but also to the prevailing social values. When we see around us people and businesses regularly and blatantly flouting the system - paying bribes in wads of notes, using tax havens to "legitimately" reduce their tax liabilities etc. - there is a tendency to say "well if they can do it, what's the harm?"

And with the sheer incompetence and venality of successive governments in this country, I can't see this changing any time soon.

People need to start doing more for themselves, the way people used to do and not wait for government to provide everything for them.

I was chatting to very nice Korean gent today, in weeks he has a productive vegetable garden going in a yard that generations of renters have used as a dump and refused to mow the grass. Will be dropping off some seedlings to him later. His English is poor but gardeners don't always need words.

I sold good businesses when it was impossible to keep them small and expansion was not really worth it after taxes and other costs of doing business were taken out.

I reckon there is a future for communities to exchange products and services among themselves. People are inventing ways to join in the fun. There is an old fellow locally who exchanges his jams for services he needs. We give away stacks of soups, pickles and other foods that I make for family members. I always make too much, a carry-over from farm days, packaging it and setting aside for other locals who appreciate and value (and may need) such things. Maybe one day someone could do the same for me.

Although as intimated earlier, there are always those who would die in a week were it not for Centrelink, Town Water and Coles.

Paul1405, maybe some of your 'Watermelon' Greens can do something for themselves instead of constantly minding other people's backyards and business for them?

I'm a tradesman and I never ask for cash, it's bad manners and makes you look dodgy, if the client offers to pay cash up front that's a different story.
and...to hell with the government, we should all be working toward marginalising and eventually eliminating the federal government altogether.

Paul, by far the best method of restricting the cash economy would be to introduce a transaction tax. Because the vast majority of money is now paid in to (by way of wages) and withdrawn from bank accounts, there would be no dodging of the small tax.

Of cause the other grey area is online purchases, those under the threshold, as they too would be taxed if a TT was introduced.

Off shore deals would also be caught in the TT web. It's a win win but no one will go there. Go figure!