Government basks in IMF praise as Coalition attacks Labor’s ‘addiction to spending’

Following the release of its annual economic check-up on Sunday (15 February), the IMF found that while Australia was managing a soft economic landing, it faced risks to its outlook, which was skewed towards slower growth and higher inflation as a result of a reliance on direct taxes and a high effective cost of capital, hindering investment and productivity.

In its report, the IMF recommended that Australia implement comprehensive tax and expenditure reform to improve the efficiency, equity, and sustainability of the tax system, with options including an “increase in Goods and Services Tax (GST) rate and removal of GST exemptions, offset by changes to Corporate Income Tax (CIT) settings”.

In response to these results, Treasury welcomed the report as a laudatory endorsement of the government’s responsible economic and fiscal management.

In a statement, it said: “The IMF’s report shows that our economic agenda with cost-of-living relief, budget repair, and economic reform is the right approach.”

Despite pointing out that it took the right approach, Treasury acknowledged the issues of high inflation and productivity, and global uncertainty.

On Monday (16 February), Treasurer Jim Chalmers told ABC radio: "There are some ideas in these reports that we agree with, some that we don't, that we won't be picking up and running with."

“But overwhelmingly, this IMF report was a very positive report about Australia and about the government's economic plan,” he added.

Despite the Albanese Labor government saying that the IMF praised its management of the budget and economy, the opposition pointed to the first Senate estimates hearings of 2026, and said it exposed the government’s mismanagement and inability to keep Australians safe and secure.

Leader of the opposition in the Senate, Senator Michaelia Cash, said: “Labor’s addiction to spending taxpayers' money continues unabated, and we were able to expose this once again at estimates.”

“We exposed there has been a $54 billion blowout in the medium-term budget bottom line since the election, and MYEFO shows there will now be no budget surpluses for a decade.”

“This is why living standards have declined, and Australians are hurting under Labor,’’ she added.

Deputy leader of the opposition in the Senate, Senator Anne Ruston, said: “Senate Estimates has once again demonstrated the wasteful spending and lack of transparency from the Albanese Government, while families face rising costs and declining access to essential services.”

“Australians deserve responsible and transparent economic management that puts Australians first, but sadly that is the opposite of what has been revealed,” Senator Ruston concluded.