In a recent economic survey report, the Organisation for Economic Co-operation and Development (OECD) has advised Australia to reconsider its current taxation approach.
The organisation suggests broadening and potentially increasing the goods and services tax (GST) to offset the financial burden on a diminishing workforce.
The OECD points out that Australia garners 26.5% of its tax revenue from GST, below the 32% OECD average.
The recommendation, however, faces challenges as all Australian states and territories must agree unanimously to modify the GST rate.
Furthermore, such a tax is often regressive, disproportionately affecting lower-income households.
The OECD suggests offsetting this with enhanced social welfare benefits.
Significant focal point
Another significant focal point is superannuation tax concessions.
The Australian government has plans to halve tax breaks for individuals with super balances of $3 million or more.
The OECD advises revisiting these concessions, especially in the light of an ageing population increasing demands on public finances.
The intergenerational report released in August underlines this issue, projecting more spending on health and aged care.
Need for reforms
Michael Keating, former head of the Department of Finance, will echo the OECD's sentiments in an upcoming speech at the Australia Institute's Revenue Summit.
He will emphasise the need for reforms like carbon tax, congestion charging, and replacing stamp duty with land tax.
Treasurer Jim Chalmers indicated that the recommendations align well with Labor's economic strategy, including aims to invest in skills and women's economic participation. "The Albanese government's economic plan aligns with the OECD's agenda," he said.