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The International Monetary Fund says Australia’s economy is ‘enviable’ but it should expand the mining and carbon tax to ensure it is not caught by another global downturn.
In a bulletin issued on Friday the IMF said there were few weaknesses in the Australian economy, but inefficient taxes were becoming a problem.
It said Australia “was one of the few advanced economies to avoid a recession in recent years, reflecting its strong position at the onset of the crisis and a supportive macro policy response.”
“The good performance can also be attributed to a healthy banking system, a flexible exchange rate, and robust demand for commodities from Asia, especially China.”
It said removing state stamp duties and insurance taxes should be a priority for the Government, and it could recoup losses from these changes in part by expanding the mining tax.
“While tax reform entails difficult political choices, options to replace the lost revenue from these reforms include more reliance on a consumption-based tax, reforming land taxes, and broadening the coverage of the minerals resource rent tax beyond coal and iron ore.”
Greens leader Bob Brown said he welcomed the IMF call to expand the mining tax, which could be used to invest in clean energy, health care, and a sovereign wealth fund.
But last month federal resources minister Martin Ferguson ruled out including gold in the mining tax.
The IMF said a stronger carbon tax would also help return a strong budget surplus and protect the economy.
But a new report by ACIL Tasman released today said one in six of Australia’s black coal mines could close prematurely and more than 21 thousand mining jobs could go as a result of the tax.
It said 27 per cent of jobs in the coal sector were under threat from the carbon tax.