Chartered accountants believe NSW Premier Mike Baird is finally showing some leadership in proposing a lift to the GST rate and breaking a political deadlock.
They warn that unless changes are made to the GST, the burden on taxpayers will "sky rocket" as the population ages and the proportion of people in work declines.
Mr Baird has put up a proposal to increase the GST to 15 per cent from 10 per cent for discussion when he and other premiers meet Prime Minister Tony Abbott at a special leaders retreat this week.
While welcoming the proposal, Chartered Accountants Australia and New Zealand believes the meeting should take it further by broadening the base of the GST to cover everything.
Doing so would raise a hefty $265 billion over four years, it estimates.
Head of leadership and advocacy Rob Ward says the GST is too complex at the moment, covering only about 48 per cent of goods and services because fresh food, health, education and financial services are exempt from the impost.
By contrast New Zealand had taken its coverage to 96 per cent.
The extra revenue could fund compensation through family tax benefits and pension increases as well as help abolish inefficient state taxes.
But more importantly it would allow for $96 billion worth of cuts to personal income tax.
"There are so many people on average incomes that are moving into higher income tax brackets, it's ridiculous," Mr Ward told AAP on Monday.
Under his modelling $56 billion would still be left over four years for the states to fund health, education and infrastructure.
Treasurer Joe Hockey says he is aiming to take the promise of tax cuts to the next election although, he is yet to spell out how they would be funded.
"It is clear that the tax base has to be broadened because we are going to have less people working and paying income tax," he said.
"If we don't, the burden on income taxpayers will sky rocket."
CHARTERED ACCOUNTANTS AUSTRALIA AND NEW ZEALAND GST MODELLING.
Increase the GST to 15 per cent and broaden the base to 100 per cent of goods and services.
* This would deliver $265 billion over four years.
* This could provide compensation in the form of $96 billion in personal income tax cuts, $62 billion in benefits and pension increases and $13 billion in family benefits.
* $38 billion of the remaining $94 billion could abolish inefficient state taxes.
* The remaining $56 billion over four years takes pressure off the commonwealth budget and provides state funding for health, education and infrastructure.
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