Real target of May budget finally revealed

The government will use the Federal budget in May to go after tax evaders using cash payments to avoid paying tax and deliberately mislead Centrelink.

Millions of Australians are thought to be using cash-in-hand payments for work in a bid to avoid having to pay tax on their income, while others are using it claim the maximum fortnightly amount from Centrelink without being penalised, reports The Sydney Morning Herald.

Many Centrelink payments are calculated based on how much a recipient has earned during the previous two-week period, with the welfare payment reduced for each dollar they were paid by an employer.

Board of Tax chairman Michael Andrew, who is heading up the government’s “Black Economy Taskforce”, told Fairfax avoiding the tax man had become “a national sport”.

“It’s a huge problem,” he said. “It’s really large and unfortunately it’s going to take a significant amount of work to turn around societal attitudes.”

He said some people were trying to do the right thing, but didn’t understand all the rules around paying tax, while others were outright cheating the system.

It is believed this strategy could win back an estimated $15 billion in lost federal tax revenue with many people expected to get an unwelcome tax bill in the mail.

Do you think this is a good thing to focus on in the budget? Where would you like to see budget savings come from?