Australia clearly needs substantial tax reform to stop an ever widening gap between expenditure and revenue, says the Real Estate Institute of Australia following the release yesterday of the Treasury’s Intergenerational Report – Australia in 2055.

“The Report clearly identifies the increasing expenditure in health and education and that this is simply not sustainable under existing policy settings," said REIA CEO Amanda Lynch. “If policies, including taxation arrangements remain unchanged, then we know from this report that it will result in an ever widening gap between expenditure and revenue. Yet, the Report also indicates that under the Government’s proposed policy settings, Australia’s underlying cash balance can be brought into surplus around 2019-20.”

Lynch said the report establishes a very compelling case to review the constant revenue slide, and that responsible tax reform will enable the Government to achieve its goals and ensure that all Australians can continue to live a healthy and prosperous life. “In several sections, the report clearly states that a better tax system would help Australia to take advantage of global opportunities and improve economic growth without having to rely on bracket creep or increased corporate taxes," she said. “REIA believes that tax reform can achieve the Government’s aims, as presented in the Report, of improving productivity and increased workforce participation, particularly by the young, mature aged workers and women.”

REIA has long argued for the Government to review the GST and abolish inefficient taxes, including stamp duty.