Australia’s Flawed Tax System in Spotlight Ahead of Next Budget

Australia’s outdated tax system is buckling under spending pressure, prompting the Labor government to explore options to boost revenue to pay for programs including a vast defense build up and health care weeks before budget day.

At the heart of the problem are large areas of wealth that are all-but exempt from taxation, leading to an over-reliance on income taxes that are already among the highest in the developed world. At a time when the economy is fully employed and commodity prices are elevated, Australia is forecast to run a budget shortfall equivalent to 2% of gross domestic product in ...