The International Monetary Fund has issued an unprecedented warning that the federal government may need to bail out heavily indebted states and territories such as Victoria and the Northern Territory, as it called on Treasurer Jim Chalmers to press the states to rein in spending and overhaul property taxes.
In its annual health check-up of the Australian economy ahead of Chalmers’ May budget, the IMF said a review of spending and tax across the federation was needed after a big jump in state debt and spending on social areas, cost-of-living help and infrastructure since the pandemic.
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