CPA Australia backs IMF call for tax reform – and GST must be central

Australia’s largest accounting body, CPA Australia, has welcomed the International Monetary Fund’s (IMF) call for comprehensive tax reform as part of the government’s productivity agenda, and reiterates its proposed five-step roadmap to broaden the tax base by modernising the GST.

The IMF statement notes Australia’s economic soft landing while cautioning that delays in productivity-enhancing reforms may hinder resilience.

CPA Australia’s Tax Lead, Jenny Wong, said the IMF is right to acknowledge that without fundamental tax reform – including broadening the GST – Australia risks an extended period of economic stagnation. 

“Australia relies unsustainably on personal and business income tax, weakening our productivity and compressing household budgets,” she said. “The need to diversify Treasury revenue sources while reducing debt build-up is obvious, but can only be achieved through bold tax policy.

“The IMF sends a powerful signal – comprehensive tax reform is vital to preserve Australia’s economic momentum. CPA Australia has long championed a national, bipartisan roadmap, anchored in GST reform, that broadens the tax base, simplifies compliance and ensures fairness. 

“The government’s narrative on productivity reform has been encouraging to date, but this vision must now translate into concrete action. Without structural reform, Australia risks higher costs, stalling investment and eroded competitiveness.”

To mark 25 years since the introduction of the GST in July this year, CPA Australia proposed a five-step roadmap to broaden Australia’s tax base, reduce overreliance on income tax and enhance economic sustainability.

1. Achieve consensus from state and territory governments that GST reform is critical to future federal and state budgets and must be part of economic and productivity reforms. 
2. Identify what a broadened tax base should look like and model the revenue effects of changes to the rate.
3. Assess the impact of changes on business and society.
4. Develop tax settings that best rebalance the tax base to increase GST’s contribution and reduce the income tax burden on individuals and businesses while adjusting the transfer system to support the most vulnerable.
5. Design a thorough implementation program to ensure that individuals and businesses are prepared for the changes.

“This is no time to lose momentum,” said Ms Wong. “This is the time to develop a step-by-step approach to deliver once-in-a-generation reform of the tax system while educating and informing the public of its necessity along the way. Broad public and political support will be essential to ensure our tax system is fit for purpose for future generations.”

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