A review of the Australian tax system by the Parliamentary Budget Office has brought tax vulnerabilities into focus, months before the Turnbull government and Labor battle over tax in the next federal election.
Workers will contribute more to Australia's overall tax system unless the government delivers major tax reform, as companies minimise their tax obligations, along with lower consumer spending.
To add to revenue concerns, soaring healthcare and education costs - which are GST exempt - meaning with historically low-wage growth, households are not spending on discretionary items that contribute to GST.
The review found in the absence of other taxation reforms, maintaining tax revenues as a share of GDP will lead to an increasing reliance on taxes through the personal income tax system if the risks eventuate.