The International Monetary Fund has dealt a raw reality check to Treasurer Jim Chalmers, arguing he will need to cut spending, rethink GST and pursue wider tax reform to raise Australians’ standards of living.

The financial institution released its annual review of the state of Australia’s economy, outlining it was concerned with state and territory level debt and wider structural spending pressures.

The IMF took aim at state spending, suggesting the Commonwealth should take greater interest and offer more oversight through the Parliamentary Budget Office or Federal Treasury.

“Rising state and territory debt, driven by increased infrastructure, health and social protection spending, and exacerbated by uneven commodity revenues, has caused missed sub-national fiscal targets and widening

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