Fairfax has published another alarming report on the widespread exploitation of foreign workers, who are working for below the minimum wage in cash-in-hand jobs across Australia’s black market services economy:
More than 5500 workers dob in their bosses to the Australian Taxation Office every year for allegedly paying them “cash in hand”…
Another 2813 complained about inadequate or no super being paid, 961 reported “payment summary issues”, 736 complained that their employer failed to remit PAYGW, and 671 complained about the “status of worker” (whether they are legally an employee or independent contractor)…
The ATO estimates about 1.6 million businesses (mostly micro and small businesses with an annual turnover up to $15 million) operating across 233 industries are part of the illegal cash economy…
These include cafes and restaurants, carpentry and electrical services, hair, beauty and nail specialists, building trades, road freight and waste skip operators and cleaners…
While the cash economy risk has been identified, the ATO does not have a robust estimate of the level of revenue at risk from the cash economy.
Earlier this year the ATO’s public groups deputy commissioner Jeremy Hirschhorn hinted at “an implied range” of “about $2 billion to $3 billion”…
The most damning assessments from the Committee were regarding Australia’s Working Holiday Maker and student visa holders, who were “consistently reported to suffer widespread exploitation in the Australian workforce”.
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The Committee also noted that undocumented foreign workers were eroding labour standards for Australian employees:
The committee received evidence that undocumented work by migrant labour has resulted not only in the severe exploitation of highly vulnerable workers, but also impacted Australia’s labour markets, including placing downward pressure on the wages and conditions of Australian workers and undercutting the majority of legitimate employers that abide by Australian workplace laws.
Similarly, back in June, ABC’s 7.30 Report documented systemic fraud within Australia’s working and student visa programs (summary post here).
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Herein lies one of the great contradictions of the Turnbull Government. While it has sought to cruelly persecute asylum seekers arriving by boat people, it has done little to address the many thousands of migrant arrivals to Australia by plane that are being routinely exploited by employers and undermining overall Australian working conditions.
Australians are growing tired of the flagrant disregard for Australian law. The systematic abuse of Australia’s visa system is harming the prospects of local workers; harming small businesses that do the right thing; harming the temporary foreign workers being exploited under slave-like conditions; and harming the integrity of the tax system, which is losing revenue via the black economy.
The Government should focus its attention on closing down these rorts.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
