Fed: Black economy blows out to $100 billion

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Fed: Black economy blows out to $100 billion

CANBERRA, Aug 19 AAP - The black economy had blown out to $100 billion a year and thetax office needed a shake out, opposition treasury spokesman Mark Latham said today.

He said the most recent estimates from the Australian Tax Office (ATO) were that thecash economy was 15 per cent of Australia's GDP or around $100 billion - bigger than NewZealand's economy.

"It's just fundamentally unfair that the black economy has grown so huge, that ordinarytaxpayers are paying so much and that the federal government is totally smug and complacentabout this problem," Mr Latham told reporters.

"It really is time for a shake out at the tax office.

"Extra resources are important but the big thing they should be doing is unchainingthe field officers from their desk and getting them out in the field."

Mr Latham said many businesses were double quoting, offering one quote including theGST and one without if cash was paid.

"It's $100 billion worth of money that's not being reported to the tax office so thescale of tax avoidance is just huge," he said.

"For the people who work hard who do the right thing, who are fundamentally honest,it's just so unfair that the the black economy has grown so big and so little is beingdone about this particular problem."

A report from the University of Technology Sydney found the black economy had grownfrom 14 per cent of GDP to 15 per cent of GDP or $7 billion since the GST was introduced.

The government had repeatedly said that the introduction of the GST in 2000 would helpreduce tax avoidance.

AAP sal/maur/bwl

KEYWORD: TAX LATHAM