Government rejects Treasury Secretary's call for broader GST base

The federal government has hosed down suggestions the GST could be changed to help cover declines in budget revenues.

Treasury Secretary Martin Parkinson raised the proposal during a speech in Sydney when he said hikes in indirect taxes - such as the GST and and fuel excise - would be needed to offset an unsustainable reliance on income tax earnings.

The government's tax system inquiry would need to consider a role for a greater contribution from indirect taxes, to ensure a sustainable budget and maintain growth in living standards, he said on Wednesday.

But Deputy Liberal Leader Julie Bishop is adamant that widening the GST base to areas like health, or increasing it from 10 per cent, is not on the government's agenda.

"We're not changing the GST," the foreign minister told ABC Radio on Thursday.

She also ruled out indexation of the fuel excise, saying the government had "no plans to do that".

The government has pledged to take any new proposals to change taxes to the next election.

Ms Bishop pointed out GST revenues were directed to the states so increasing it wasn't a quick fix for the federal budget.

She agreed the government faced making hard decisions on spending in the budget due on May.

"We are not a government that believes in higher taxes; we believe in lower taxes," she said.

Parliamentary Secretary to Prime Minister Tony Abbott, Josh Frydenberg, said the government's focus was on streamlining taxes.

He repeated the government's plan to get rid of the carbon and mining taxes.

Shadow treasurer Chris Bowen said broadening the GST base would disproportionately hit people on lower to middle incomes and ruled out Labor supporting any such changes.

He also said Dr Parkinson had never advised him of the need to change the GST when he was treasurer last year.

"Budgets are about priorities ... this government has twisted priorities," Mr Bowen told ABC radio.