Prime Minister Tony Abbott has brushed aside calls from a Coalition senator to broaden the GST to include fresh food, as the government faces a backlash from the states over funding cuts to education and health.
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Speaking in Canberra on Tuesday, Mr Abbott again put the onus back on the states to lead discussions on the changes to the consumption tax, after Senator Ian Macdonald suggested the GST base be expanded.
Mr Abbott again insisted that his government had "fundamentally" kept faith with the Australia people, despite breaking election promises not to increase taxes, cut health, education, family payments and pensions.
But Opposition Leader Bill Shorten accused Mr Abbott of lying to Australians when he said he no plans to rise the GST, as he had lied about cuts to pensions, hospitals and education.
Mr Abbott said on Tuesday he did not accept his government's first budget had breached faith with the Australian people, even as support for his government plummeted in Monday's Fairfax Nielsen poll to trail by 12 percentage points, 44-56, in the two party preferred vote.
"I think we've fundamentally kept faith with the Australian people because as many of you were sick of hearing me say during the election, we would stop the boats, we would scrap the carbon tax, we would build the roads of the 21st century and we'd get the budget back under control,'' he said.
While the Prime Minister said he "accepted" the government had imposed a 3 per cent deficit levy on people earning more than $180,000 and re-started the indexation of fuel excise, "I believe it's absolutely necessary to ensure that is budget is not just fiscally responsible but fair as well".
Mr Abbott declined to say on Tuesday if former prime minister John Howard had been wrong to propose applying the GST to fresh food, a measure dropped after a compromise deal was struck with the Democrats to pass the package through the Senate.
"I was part of the government, the government had a position, the position of the government was ultimately subject to negotiation in the Senate and the result was accepted by the government and it's been accepted by the Coalition ever since,'' he said.
"I'm just not going to specuale 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 Mr Shorten said Senator Macdonald had "let the cat out of the bag" about the federal government's plans for the GST.
"He is telling Australians what the Abbott government really wants. Be very worried, 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.
"The worst news for anyone about the GST is when Tony Abbott says he won't increase it because we all know Tony Abbott says one thing before an election and does something afterwards."
Earlier on Tuesday, ACT Labor Chief Minister Katy Gallagher backed former Victorian Labor premier John Brumby in arguing the GST needed to be examined as part of the government's taxation review.
''And if you are having a look at the GST you have to be mindful of the impacts on particularly lower income people,'' she told ABC radio on Tuesday.
Agriculture Minister Barnaby Joyce said on Tuesday that discussions about GST were hypothetical and premature.
''It's so far off it's just not worth hypothesising about,'' he told ABC radio.
