Australia's Goods and Services Tax (GST) is a consumption tax of 10 per cent levied on transactions of most goods and services.
GST applies to most transactions in the production process, but only the final consumer pays the tax: all other parties in the chain of production claim a refund.
First proposed by Paul Keating in 1985 but found by proponents on both sides of parliament to be unpalatable to voters, it was finally brought into being by the Howard Government in July 2000.
The GST replaced the previous federal wholesale sales tax system and was also designed to phase out a number of state and territory government taxes, duties and levies, such as banking taxes and stamp duty.
All money raised from the GST is distributed to the States and Territories and the amount is based on the population of the State or Territory.
Western Australia, Victoria and Queensland want the tax reviewed and changes made to the way its distribution is calculated to benefit their budget coffers.
However, there can be no change to the tax, in any shape or form, unless ALL the States and Territories agree and both houses of federal parliament sign off on any changes.
Few taxes have been as politically fraught as the GST.
The deal, brokered by then Prime Minister John Howard and the Democrats in 2000, was not only controversial for its political ramifications, but for the economic debate that ensued.
Debate over the effectiveness of its revenue, scope, and capacity for collecting and distributing revenue has continued for the past 13 years.
