Undercover video: Watch Auckland tradies offer cut price deal in return for cashie

Like the Auckland housing market, the cash economy is booming.

The Inland Revenue Department estimates that its value is in billions of dollars, and a large proportion of that is happening in the building industry.

A tradesman gives ONE News a cash quote for a renovation job in a house without being asked. Source: Breakfast

Now, a ONE News investigation has revealed a thriving blackmarket in the renovation trade, which is expanding in scale.

We took one Auckland house badly in need of repair and we asked six tradesmen, chosen at random, to quote us for fitting a new bathroom and kitchen, re-painting and installing new carpet.

The IRD's Andrew Stott hits out at those who engage in cashie jobs. Source: Breakfast

The work would be valued at between $10,000 and $20,000 depending on the scope of the work quoted by each tradesman.

Fifty per cent of tradesmen provided a cash price, without being asked - and their quotes ranged in value from $10,000 to $18,000.

John Gray from the Homeowners and Buyers Association of New Zealand says the black market is being fuelled by a skills shortage in the city due to the building boom.

"There is a real shortage of competent and capable and licensed building practitioners because they're being drawn into doing all of this new build work," said Mr Gray.

"So, for the relatively smaller jobs, people are gravitating towards tradies who advertise in local community newspapers, and are not licensed building practitioners."

And Mr Gray points out that there are risks for the consumer when they choose to enter the black economy.

The holes you can hide this sort of money in are becoming smaller and smaller - Andrew Stott from Inland Revenue

"If these people are willing to break the law when it comes to paying tax are they willing to break the building law and are you going to end up with non-compliant building work?" 

Crackdown on tradies

So who is breaking the law when a cash price is negotiated?

Andrew Stott from Inland Revenue says it's "the tradesperson breaking the law - the tradesperson is responsible for paying taxes on their income," while for the consumer "it's not illegal to pay cash - it's just silly".

The Inland Revenue is today launching a crackdown on tradies doing cashies, their third campaign in Auckland and Christchurch.

Mr Stott's advice to anyone doing work for cash and not paying tax is simple.

"Watch out. The holes you can hide this sort of money in are becoming smaller and smaller and we are constantly finding people.  A second piece of advice is just think about your part in New Zealand and your part in your industry, and play your part."

ONE News is not revealing the identities of the tradespeople it filmed.