The Organization for Economic Cooperation and Development (OECD) has recommended that Australia explore the possibility of increasing its consumption tax rate and reducing exemptions. This advice comes as part of the OECD’s latest economic survey of the country, which suggests that changes to Australia’s goods and services tax, as well as other tax and spending reforms, are necessary to create a robust fiscal framework. These measures are aimed at rebuilding fiscal buffers and addressing the fiscal challenges posed by an aging population.
The economic survey anticipates modest economic growth in Australia up to 2025, although factors like high interest rates and cost-of-living pressures could affect household spending. The OECD further predicts an increase in unemployment to approximately 4.4% in 2025 and expects inflation to continue to moderate.