The Australian Taxation Office (ATO) is intensifying its efforts to address businesses operating within the “shadow economy,” as demonstrated by recent surprise inspections targeting vineyards in South Australia. This operation, known as ‘Operation Zephyr,’ is part of a broader initiative to combat underpayment, tax evasion, and the exploitation of migrant workers.
In a coordinated effort, the ATO collaborated with the Fair Work Ombudsman (FWO) and the Australian Border Force (ABF) to inspect 18 vineyards located in renowned regions such as the Barossa Valley, Adelaide Hills, and McLaren Vale. Inspections involved discussions with vineyard managers, employees, and labour hire providers, during which they obtained detailed records, including contracts, invoices, pay slips, and work rosters. Investigations are ongoing.
This recent initiative follows a series of similar inspections across Australia. Previously, the ATO and FWO scrutinised 25 fast-food establishments on the Gold Coast, examined 30 food businesses in Darwin, and conducted audits of 50 agricultural industry taxpayers in Gatton. Assistant Commissioner Tony Goding remarked that illegal practices such as ‘paying under the table’ or using unreliable labour hire companies undermine both industry integrity and public trust.
Goding cautioned vineyard owners to remain vigilant, particularly when confronted with suspiciously low labour costs, as these often signal illegal practices. He emphasised that such shortcuts not only exploit vulnerable workers but also damage the industry’s reputation.
In an effort to identify high-risk employers, regulators are employing data analytics and insights from the Shadow Economy Taskforce, aided by community tips. The ATO has reported receiving nearly 1,000 tips each week regarding suspected tax evasion, amounting to nearly 50,000 alerts in the financial year 2024-25 alone. Behaviours associated with the shadow economy are believed to result in significant lost tax revenue for the government.
FWO’s Anna Booth stated that the agriculture sector, particularly viticulture, is a priority for regulatory scrutiny due to its dependence on vulnerable and migrant workers. She reinforced that migrant workers possess the same rights as any other employees in Australia under the Fair Work Act, stating that protections exist for those who report any violations.
ABF Commander John Taylor highlighted the importance of migrant workers to the South Australian economy but stressed the unacceptable nature of any exploitation or misuse of the visa system. He asserted that operations like these clearly convey that Australia will not tolerate worker exploitation or visa abuses.
Overall, these inspections underscore the regulators’ commitment to enforcing laws concerning pay, taxes, superannuation, and immigration whilst safeguarding the rights of workers in Australia.
