PM Malcolm Turnbull wants states to support GST hike

PRIME Minister Malcolm Turnbull is expected to start spruiking a GST hike well before the election if he can get the states onside.

Cabinet secretary Arthur Sinodinos said time would be needed to gain public support, as details emerged of a plan to increase the tax from 10% to 15%.

"If you're someone like Malcolm Turnbull if you want to do something substantial you've got to do it quickly and upfront," Senator Sinodinos told Sky News.

"You have to do it soon in the context of putting stuff to an election rather than seeking to foist something on people before an election."

But Sen Sinodinos said the move would require the states to be "at least neutral" on the issue - an unlikely task, given Victorian Premier Daniel Andrews said yesterday he would not support any increase.

Treasurer Scott Morrison said reports of the shifting GST were purely speculative as part of a wider conversation about tax reform.

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"The Federal Government is involved in good faith discussions with the states and territories on how we can work together to improve our tax system," he said.

"Next year the average wage earner will be in the second highest tax bracket. That is not a sustainable position for us to be in if we want to encourage Australians to work, save and invest.

"Fixing the tax system is not about trying to increase the tax burden on Australians to chase ever higher levels of spending."

Any change to the GST is likely to be coupled with incentives such as tightening superannuation exemptions for the rich or reduced income tax rates for the country's lowest-paid workers.

Opposition Leader Bill Shorten said Labor would fight tooth and nail to stop the policy.

"When it was introduced nearly two decades ago, everybody said it would never go up," he said.

"A GST of 15% means you pay more to go and see the doctor, you pay more when you do your shopping, you pay more in your education cost.

"The case hasn't been made out for increasing the cost of living for families who are already battling to make ends meet."

-APN Newsdesk

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