Opposition Leader Tony Abbott has again been forced to deny a coalition government would raise the GST, calling it a Labor scare campaign.
Assistant Treasurer David Bradbury warned on Thursday that the coalition was undertaking a review to increase the GST to 12.5 per cent or extend it to cover fresh food.
He said either GST will be increased or "savage" cuts made to fund promises like the paid parental leave scheme.
"You either have to make savage and deep cuts to jobs, health and education, or you've got to jack up taxes like the GST," Mr Bradbury told reporters in Sydney."
"The prospect of increasing the GST will be a kick in the guts to so many local families and pensioners."
Labor has ruled out any increase to the GST.
But Mr Abbott said this was just more lies from the Labor party on the GST.
"The GST is not going to change, full stop," he told reporters in Tasmania.
"The Labor party in its desperation is just peddling lies, they are just more Labor lies.
"I just want to warn people, there is going to be a scare a day, there is going to be a lie a day."
The coalition has said it will undertake a review of the taxation system should it win the September 7 election that would take in the GST, but that any substantial changes would be taken to the next election.
The GST, which remained at 10 per cent since it was introduced in 2000, does not cover fresh food, health and education.
NSW Treasurer Mike Baird said he would welcome a "mature discussion" on a change to the GST with Mr Abbott and Shadow Treasurer Joe Hockey should the coalition win the election.
"What we need to do first and foremost is to have that mature discussion," Mr Baird told reporters in Sydney.
"We need to have it in the interests of the state and interests of the country."
Mr Baird also said looking at the issue before the September 7 election would not be responsible because scare campaigns are not in the interests of tax reform or good policy.
