Releasing PwC’s analysis of the Budget, PwC partner Paul Abbey said reforms are required to decrease the ballooning debt of states and territories, as well as fund vital investment in infrastructure.
"These jurisdictions have a much smaller capacity to cut spending and generate revenues, so a completely new tax framework is the only solution to the problem,” he said.
Mr Abbey said Australia must decrease its reliance on profits-based taxes, which are more susceptible to global volatility, and rely more on broad-based taxes.
“The process of reform should involve genuine consultation with business, unions, social welfare groups and the wider community. This will take time and we urge the government to open consultation on the white paper on tax reform as soon as possible,” he said.
“Comprehensive tax reform must be a grand bargain that underpins economic growth, looks after the vulnerable and low income groups and delivers secure budgets at all levels of government,” said Mr Abbey.