Australia should raise more revenue from the goods and services tax and diversify its industries to ride out the end of the mining boom and fragile world economic recovery, the head of the International Monetary Fund says.

Christine Lagarde, who is due to arrive in Brisbane on Thursday for the G20 summit, has told Fairfax Media that Australia must boost its productivity after relying on commodities for the past decade.

She said the IMF supported increasing or broadening the GST rate as long as the poor were compensated.

“A broad-based consumption tax with a uniform rate is generally a solid way to raise revenue,” she said in an interview with the Australian Financial Review.

Lagarde, speaking from Washington, said Australia must diversify its economy beyond mining to take advantage of China’s demand for tourism, healthcare and finance.

And Australia must get better at using its workforce and capital, she said.

Lagarde said Australia’s focus on growth was the right strategy given uncertainty about the world economy.

“If there’s anything policymakers want, its growth and jobs,” she said.