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Australian tax system not fit for aging population

04-11-2023  Gday India

Australia's tax system is inadequate to properly fund government responsibilities, experts warned. 

In a speech to Canberra-based think tank the Australia Institute's Revenue Summit at Parliament House on Friday, former Department of Finance head Michael Keating called for a full-scale public review of the funding needed for the adequate provision of government services. 

Keating, who served as secretary of the department between 1986 and 1991, told the summit that by his estimation Australia's structural budget deficit, which occurs when public spending exceeds government revenues, would surpass 3 per cent of gross domestic product (GDP) within a decade. 

He said spending cuts are unlikely to remedy the problem, instead advocating for new taxes that "improve efficiency" including congestion charges and a tax on greenhouse gas emissions. 

The summit coincided with the release of a report from the Organization for Economic Co-operation and Development (OECD) calling for Australia's federal government to raise and broaden its consumption tax -- the general sales tax (GST). 

According to the economic survey report, 26.5 per cent of Australia's total taxation revenue comes from GST compared to an average of 32 per cent among OECD member nations. 

It said that the government relying on personal income tax was risky considering Australia's aging population and recommended eliminating GST exemptions for education, healthcare, food and water. 

Treasurer Jim Chalmers has previously ruled out making any change to GST, which has remained at 10 per cent for most goods and services since it was introduced in 2000 but told the Australian Associated Press that the government's economic plan "aligns" with the OECD's agenda.  (IANS) 

04-11-2023  Gday India

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