Shadow economy

ATO cash job crackdown

The term ‘black economy’ has changed to ‘shadow economy’. This change has been made to reflect the Organisation for Economic Co-operation and Development’s (OECD) definition of unreported or dishonest economic activity.

The shadow economy affects all Australians. It refers to dishonest and criminal activities that take place outside the tax and regulatory systems.

Although most people do the right thing, some people and businesses deliberately avoid paying the right amount of tax. For information on how this is being addressed, see the ATO’s Our focus.

Those who participate in the shadow economy reduce the funds available for essential community services, such as:

  • health care – including Medicare and hospitals
  • disaster response – for example, during bushfires, floods, droughts, COVID-19
  • education – including schools and teachers
  • transport and infrastructure – including airports, roads and railways.

For details on how this affects everyone, see The shadow economy explained.

The ATO is committed to tackling the shadow economy and creating a level playing field – see The whole-of-government shadow economy action plan.