Matt Harris

I think it is a number of different reasons.

So first of all, when you deal with income tax, often it is done in arrears.

And so what I mean by that is we've just finished the 2026 financial year, but a lot of people would have only potentially just filed the 2025 year and they'll be taking care of that tax right now.

the next tax will carry on.

And it's kind of, you're always paying in arrears.

And so if we look at that example, right, what also happens, COVID, and during COVID, first of all, there was a big fright, but then right after that, actually, a lot of businesses actually did pretty well.

And they made a lot of money, with the exception of Hospo.

And so the economy for a very brief amount of time was actually quite good and then since then, once interest rates started to rise and inflation started to really take grip, the cost of nearly everything has gone up and none so more than within businesses.

So I'd call it a hangover from those kind of things all compounding and businesses have got to the point where they're paying their tax and arrears

costs have really run riot in their business and they just don't have the money to pay the amount of tax that they owe from a time that has now passed.

Yeah, that's exactly right.

And what happens is that

especially around April, May, you get terminal tax and you get your provisional tax instalments and you might still be trying to meet your past tax instalments and it starts to snowball.

And that $9.3 billion figure, we're not told how much of that is penalties and interest.

I'd assume it's a hell of a lot of it.

Yeah and this is a good one because this is what actually gets people in trouble and it can be quite shocking especially if you look back over several years and you haven't quite dealt with your tax properly.

So first of all Inlay Revenue charges what's called use of money interest which is quite aptly named because they're charging you interest because you have the use of their money.

And when you look at tax, tax is the government's money, it's not your money.

So that framing is quite right.

So the current rate for underpaid tax is about 8.9%.