South Australian Premier Jay Weatherill has backed a potential GST hike if there's an increase in the overall tax take and compensation for low-income earners.
"Nobody wants to say it out loud because it's unpopular to say it. But we're not raising enough money to actually meet the needs that the community are putting on us. It's a simple truth," Mr Weatherill told 5AA radio.
"If we're not talking about increasing the overall tax take, then you're not going to be able to essentially fill the hole that was created by the $80 billion cuts to health and education that occurred in Joe Hockey and Tony Abbott's first budget."
Commonwealth modelling has shown the government would more than double its revenue if it increased the GST to 15 per cent and broadened the tax base.
The Parliamentary Budget Office, at the request of Nationals MP David Gillespie, found that changing the GST to a New Zealand-style model would generate an extra $65.6 billion in revenue in 2017-18 to a total of more than $130 billion.
But SA's opposition said a GST hike would worsen SA's 7.9 per cent unemployment rate and that the government should cut waste instead.
"We don't think that we're going to create any more jobs in South Australia by increasing taxes," opposition leader Steven Marshall told ABC radio.
"That's going to cost jobs at a time when we already have the highest unemployment rate in the entire nation.
"What the government hasn't done is cut its own costs ... cut out its own waste, its own inefficiency."
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