13 November 2014
IMF's Christine Lagarde backs GST rise
Australia should raise more revenue from the goods and services tax and diversify its industries to ride out the end of the mining boom and fragile world economic recovery, managing director of the International Monetary Fund Christine Lagarde says.
Ms Lagarde, who is due to arrive in Brisbane on Thursday for the Group of 20 leaders summit, said Australia must boost its productivity after relying on “mother nature’s blessing by the way of commodities” for the past decade.
As the iron ore price slumps to a 5½ year low, the IMF advises Australia to embark on tough economic reforms, including tax changes, to extend 24 years of growth.
After Prime Minister Tony Abbott last month signalled he was open to increasing or broadening the 10 per cent GST, Ms Lagarde said the IMF was supportive as long as the poor were compensated.