<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The International Monetary Fund (IMF) has advised the Australian government to raise the goods and services tax (GST) and tighten spending in its annual check-up of the economy.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Washington-based IMF issues an Article IV report for each member country, which assesses economic policies and outlook and provides recommendations.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In Australia's report published today, the IMF said the Australian economy was "gaining momentum" and forecast to grow to 2.1 per cent next year after recently returning to balance.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/pfas-senate-inquiry-final-report-calls-to-ban-forever-chemical/f8f20b62-ef9d-48b4-a4dc-863594ef32c8" rel="" target="_blank" title=""><strong><span>'Asbestos of the 21st century': Calls to ban chemical Aussies are exposed to every day</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The Commonwealth's fiscal strategy has been effective over the post-pandemic period, but if structural spending pressures intensify in the future, clearer fiscal anchors could help to safeguard fiscal sustainability," it said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF called for tax reform to boost the economy, including a higher GST and the reintroduction of a mining tax.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"A comprehensive tax reform package could usefully complement these efforts by helping boost economic efficiency, productivity and intergenerational equity," it said.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/imf-urges-australian-government-to-raise-gst-and-tighten-spending/58d0ba84-de3d-46a2-8bbc-42450f81ac3f" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"For example, an increase in indirect taxation [GST], the reintroduction of a resource revenue tax, and removing income tax exemptions could offset lower corporate and labour taxes, thereby lowering the cost of capital and increasing incentives for investment and work."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Australia's largest accounting body, CPA Australia, echoed the call for bold tax reform and said the economy could stagnate without it.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Australia relies unsustainably on personal and business income tax, weakening our productivity and compressing household budgets," CPA Australia's tax lead Jenny Wong said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The IMF sends a powerful signal – comprehensive tax reform is vital to preserve Australia's economic momentum."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/new-underquoting-laws-victoria-reserve-price-disclosure-set-to-be-introduced/f98139b7-96d6-4f95-95d1-60440c3c1318" rel="" target="_blank" title=""><strong><span>Fresh laws will stop dodgy real estate agents from underquoting home prices</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF also noted concern over rising state and territory spending and debt and advised the federal government to scrutinise its budgets.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It suggested that the Parliamentary Budget Office of the Treasury be given oversight. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Rising state and territory debt, driven by increased infrastructure, health and social protection spending and exacerbated by uneven commodity revenues, has caused missed sub-national fiscal targets and widening disparities," the IMF said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Fiscal co-ordination across the federation is crucial to ensure equitable burden-sharing and efficient spending, especially in areas like climate governance and tax reform."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF endorsed many of the federal government's policies, which it said have helped Australia manage a "soft landing" amid global uncertainty.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Inflation is now at 3.2 per cent, just a little over the target and almost a third of its peak.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The Reserve Bank of Australia (RBA) has cut Interest rates three times this year and has kept it steady at 3.6 per cent at its latest meeting earlier this month.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF added that Australia has been able to withstand the major impacts of US President Donald Trump's sweeping tariffs.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/australia-sanctions-russian-cybercrime-network-provider/66473a90-0083-4a68-a315-ea6385801d44" rel="" target="_blank" title=""><strong><span>Australia imposes sanctions on Russian cyber firms over ransomware attacks</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>But persisting global uncertainty still poses a significant threat to the Australian economy.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Global trade policy shifts and elevated uncertainty may weigh on demand and employment," the IMF said. </span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Domestically, consumption growth may ease, delaying the recovery in private demand, and generating a rise in unemployment.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"On the other hand, inflationary pressures may prove more persistent than expected, including if a resilient job market drives stronger labour costs growth."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The IMF has, therefore, advised the RBA to maintain a "cautious" monetary policy and hold off on further interest rate cuts if data shows economic tightness remains.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Treasurer Jim Chalmers said the IMF's assessment was a "powerful endorsement of Labor's responsible economic and fiscal management".</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Together we have made remarkable progress in the economy, but we know there is still much more to do because the international economic environment is so uncertain," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We know the best way to build on all the progress we've made is to make our economy more resilient and more productive."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span></span><a href="https://www.9news.com.au/national/how-to-follow-9news-digital/29855bb1-ad3d-4c38-bc25-3cb52af1216f" target="_blank"><strong><em><span>DOWNLOAD THE 9NEWS APP</span></em></strong></a><strong><em><span>: Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. Available on the</span></em></strong><span> </span><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple App Store</span></em></strong></a><span> </span><strong><em><span>and</span></em></strong><span> </span><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a><strong><em><span>.</span></em></strong></div></div>