Black Economy Taskforce audit reveals ‘Treasury failures’

An audit report by the Australian National Audit Office (ANAO) has concluded Treasury failed to effectively coordinate the implementation of the government response to the Black Economy Taskforce report.

The Black Economy Taskforce was set up in 2016 to develop a whole-of-government strategy and policy agenda for addressing the shadow economy. The Taskforce finalised its report in October 2017 and made 80 recommendations.

The ANAO report stated Treasury did not fully establish governance and coordination arrangements, did not adequately monitor and report on progress in implementing the report’s recommendations, and did not establish evaluation arrangements.

Issues with management of information

The audit report also found Treasury’s management of information in relation to the implementation of the report did not support effective whole-of-government coordination.

As part of its coordination role, Treasury was required to report back to the government on the implementation of the report.

“Treasury did not clearly define reporting arrangements, including the frequency, the content, how to handle emerging issues and risks that arise outside the regular reporting cycle and the audience for reporting,” the report stated.

Between July 2018 and December 2022, Treasury made seven submissions to the Treasurer and assistant Treasurer providing updates on the whole-of-government implementation of the Taskforce report.

The ANAO identified several issues relating to the quality of advice given to the government by Treasury including the failure to include five of the report’s supplementary recommendations in a submission to government.

“Reporting to the government over time was in different formats and information varied over time making it difficult to track implementation progress. In January 2019, Treasury reported that 12 of the 80 recommendations had been ‘completed’. In this context, ‘completed’ meant implemented,” the report said.

“Then in September 2019, Treasury reported that 53 recommendations had been ‘actioned’ instead of ‘completed’.”

In October 2019, Treasury provided an update on the implementation of recommendations and proposed a strategy for progressing these recommendations.

“Treasury suggested that several recommendations had been implemented when, according to ANAO analysis, they had not,” the report stated.

“As of February 2023, there have been no updates to government since June 2021. Data provided to the ANAO by Treasury in October 2022 indicates that 30 per cent of all recommendations were in progress and that 30 per cent of all fully agreed recommendations were in progress at that time.”

The report also noted Treasury failed to explain why it chose not to undertake a communications and awareness campaign on the $10,000 cash payment limit despite receiving funding to do so.

Treasury received $200,000 in funding to conduct an awareness campaign and advised in February 2023 it had not undertaken the campaign.

“It is unclear why, as the bill was not discharged from Parliament until December 2020,” the report said.

The proposed cash payment limit was reversed by the government in the October 2022–23 budget.

ANAO said Treasury’s management of information in relation to the report did not support effective governance and coordination.

“Its management of information impacts its ability to be accountable and transparent,” the report stated.

“It also creates risks around its ability to provide quality and timely advice and reporting on the shadow economy to the government, and to create an effective shadow economy policy environment.”

Report recommendations for Treasury

The report made a raft of recommendations for Treasury, including that Treasury review and update its website content in relation to the shadow economy.

In order to progress the implementation of the Black Economy Taskforce report, ANAO said Treasury should review the ANAO’s findings in relation to each of Treasury’s recommendations and determine what further action can be undertaken to implement these recommendations.

It has also recommended Treasury produce a five-year report into the shadow economy to evaluate the implementation of the government response to the report, and to assess the emerging risks and trends in the shadow economy.

The audit report also called for Treasury to implement policies and procedures to “ensure that its governance and information management is fit for purpose, particularly within the context of leading and coordinating the implementation of reviews and inquiries”.

ATO and Home Affairs largely effective in implementing recommendations

ANAO found the ATO and Home Affairs had been mostly effective in implementing the recommendations they were responsible for.

The ATO established the Black Economy Program to support the implementation of its recommendations.

“Governance and processes supporting the program were largely fit for purpose, although the ATO did not always follow its processes. The ATO’s program reflected the funding provided through multiple budget measures, however, this did not always directly align with the Taskforce recommendations,” the report said.

“The ANAO found that of the six agreed recommendations that the ATO had sole responsibility for implementing, it has: implemented two; largely implemented three; and partly implemented one.”