Accounting firm PwC warn that rising government debt and falling incomes will impact on Australias ability to implement current strategies. A choice will have to be made between overhauling the tax system or radical cuts to government services including aged care.
PwC feels that despite 22 years of continuous economic growth, Australia faces the risk of falling incomes and worsening budgets that will limit the countrys capacity to accommodate external shocks, or an ageing population. The report estimates that government debt as a proportion of GDP will rise from 12.1% to unsustainable levels as the population ages of 77.9% by the middle of the century.
Chief executive Luke Sayers says that "in simple language, we need to make some choices. PwC would like to see a national conversation about tax reform, preferably ahead of the upcoming election, although any new governments likely response is cuts to services to shore up their financial position. It is inevitable that aged care will be in the firing line.
