A failure to consider serious tax reform along with burgeoning government spending may burden a generation with government debt, according to a report by PwC. Tax cuts of the last decade have renewed concerns about a structural deficit in the federal budget, whilst the erosion of the tax base along with increased spending demands on states have left their budget balances in the red. The report forecasts that public debt as a proportion of GDP would hit 33% by 2040 and 78% by 2050, representing a rise in public debt from $27.4 billion now to $583.1 billion in 2050. PwC suggests reforms to tax including weighting tax more in favour of consumption and land, and less on profits and labour to minimise loss of growth and economic distortions. (VIEW LINK)
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