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Fri December 04 2020

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Irish survey finds growth in black economy

25 Sep 13 A new survey of Ireland’s ‘black economy’ has found that 64% of construction companies have been asked to do a job for cash outside the tax system.

The Construction Industry Federation (CIF) survey also revealed that 57% of construction companies have been approached by construction workers offering to carry out work for cash payments while they were also receiving social welfare payments.

“The black economy continues to be a source of incredible frustration within the construction industry,” said CIF Director General Tom Parlon. “What the latest statistics highlight is that the problem is still out there and if anything it seems to be getting worse. It is also noticeable that there seems to be a sizeable appetite for black economy work with potential workers and clients looking to do construction work off the books.

“This kind of activity hurts legitimate construction work. 68% of construction companies have come across clients who have experienced and another 58% have had to repair poor work carried out by black economy operators. This goes to show that clients are not making the savings they might think they will by engaging black economy operators and there is clearly a trade off in the quality of work being carried out.

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“There is a reason why black economy operators are able to undercut their rivals. They don’t make the correct tax returns, they have workers using social welfare payments as a subsidy to their wages, poor quality materials are used, corners are cut, the proper building practices are not followed and the proper health and safety standards are ignored.

Other key statistics revealed in the survey include:

  • 95% of construction companies have come across a black economy operation in the last three months.
  • 70% of construction companies have come across an increased number of black economy operations since the turn of the year and 76% have come across an increased number in the last 12 months.
  • 95% of construction companies think they have lost jobs to black economy operations in the last 12 months.
  • 53% of construction companies believe that wages paid by black economy operators undercut legitimate firms by more than 20%.
  • 68% of construction companies have come across clients who have experienced problems with black economy operators or the work they have carried out, while 58% have been asked to repair the work done by a black economy operator.
  • 66% of construction companies describe the health and safety standards as poor quality on run by black economy they have come across while a further 24% would describe them as non existent.
  • 11% of construction companies are aware of accidents occurring on construction sites operated by black economy operators.
  • 37% have come across construction sites run by black economy operators where the health and safety standards put employees, clients or others at risk.
  • 30% of construction companies have found that clients do not ask if their company has insurance before starting a job.
  • 84% of construction companies would be in favour of more regulation if it helped reduce black economy operations in the construction sector and 86% believe that black economy participation in public projects could be reduced with better regulation.

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MPU

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