As the heads of governments meet in Canberra to discuss the Prime Minister's proposal to reform income tax, the Northern Territory's chief minister has questioned whether this is a bluff to restart a conversation on increasing the GST.
Malcolm Turnbull is trying to sell state and territory leaders on taking more responsibility for funding schools and hospitals by levying their own income tax, but NT Chief Minister Adam Giles said there was not yet enough detail in the proposal.
"I'm not sure whether or not it's real," he told Mix 104.9 FM in Darwin.
"Going into COAG, particularly in a federal election year you don't want a position where the PM is trying to start a fight with the states and territories, I think you need a conciliatory approach.
"I don't know whether this proposal is designed to start conflict or it's designed to start real reform."
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He also questioned whether the proposal was designed to push jurisdictions to reconsider increasing the GST.
"Is this for you to say, `if you don't like it then let's go back to the GST', or is this about a serious proposition?" Mr Giles said.
"From the surface it looks like posturing and beating the chest, trying to create some debate and a bit of an argument; I want to take the position of let's wait and see more detail before we discuss it further, rather than trying to beat people up."
If states and territories could set their own tax rates, Mr Giles said there would be a race to the bottom to cut taxes in order to attract investment.
"If I had a way right now (that) I could reduce payroll tax and stamp duty, I'd love to see them both wiped out, but of course we've got to be able to fund the operations of government," he said.
"Competition is good but you've also got to make sure you deliver services in health and education."
At the moment a change to income tax sounded like a duplication of bureaucracy, he said.
"We've got to make sure we can get the same level of income with a growth factor rather than putting more taxation on Territorians, because nobody wants to pay more tax," he said.
But he applauded the prime minister for starting the conversation: "As weird as a proposal as this looks, at least the PM is having a crack."
