A quartet of federal Coalition MPs have added their voice to calls for a national debate about reforming the GST, as an analysis of the budget warned Canberra had solved its looming debt problem by placing the burden on the states.
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In comments that build pressure on Prime Minister Tony Abbott and Treasurer Joe Hockey to lead the national debate about tax reform - rather than urge the states to make the case - Coalition MPs Darren Chester, Andrew Laming, Angus Taylor and Dennis Jensen all backed debate about raising the consumption tax on Tuesday.
Mr Abbott moved to extinguish a call from Coalition Senator Ian Macdonald for the GST to apply to fresh food and other items, putting the onus back on the states to lead the call for a rise in the consumption tax. The Prime Minister said the federal Coalition had accepted the compromise deal hammered out on the GST between John Howard and the Democrats in 1999, which excluded fresh food and it ''been accepted ever since''.
''I'm just not going to speculate on the GST, the GST is a tax which belongs to the states and obviously it is perfectly within the bounds of possibility for the states to want to discuss the GST as part of the federation white paper process.''
But West Australian MP Mr Jensen cautioned raising the rate of the GST or broadening the base to include things such as may not be the answer to a looming revenue shortfall, pointing to the mining tax as a revenue measure that ''ultimately cost us''. But he said ''we need to rethink our tax structure and the GST should obviously be included in the debate, though it has to be a broader debate''.
Mr Taylor, a NSW MP, said ''we have to have this discussion with the states and we have to have a discussion about the federation and tax reform''.
Victorian MP Mr Chester called for a rational debate about the tax, saying ''the Australian people would appreciate full and frank debate as part of this tax review and the GST needs to be part of that assessment and I understand it will be part of that review'' while Queensland MP Mr Laming backed a national debate.
But Opposition Leader Bill Shorten said Senator Macdonald had ''let the cat out of the bag'' about the federal government's plans to raise the GST.
''When the Abbott government says they don't want to increase the GST, just remember they didn't want to cut health or schools, they weren't going to attack Medicare or increase taxes,'' he said.
Analysis by accounting firm PricewaterhouseCoopers found the budget had solved the federal government's debt problem - by placing a greater debt burden on the states. The PwC modelling showed the Coalition's budget measures would see Commonwealth net debt as a percentage of GDP fall to 9.6 per cent by 2050, but state debt as a percentage of GDP would rise to 57.9 per cent in the same period.
PwC partner Paul Abbey said that scenario meant tax reform, including to the GST, was necessary.
