Getting on or getting by? Australians in the cash economy

Abstract

This paper reviews empirical evidence on the extent of and type of involvement of Australians in the cash economy. Survey data were collected from a random sample of Australians in 2000 and 2002. The results show that cash economy activity is scattered throughout the population and tends to be undertaken by different people at different times. For most of the population, the amount earned and spent in the cash economy is less than $5,000 per year. In general, Australians know cash economy activity is illegal and think it is wrong, but they seem to accept such behaviour as commonplace and part of the landscape of success and survival in a competitive world. This paper shows connections between the formal and informal economies - those who have jobs in the formal economy tend to be those with jobs in the cash economy, and people believe cash transactions of this kind occur because workers want to avoid tax and employers want to avoid superannuation, insurance and other compensatory payments. Show more