Hockey to talk to the states about GST

The federal government is reluctant to take the lead on GST reform but wants to put it on the dinner table for conversation.

Joe Hockey is hoping he can have a fair dinkum conversation about the GST now that a series of state elections are out of the way.

But the treasurer insists the federal government won't be going it alone in hiking the rate of the GST above 10 per cent or broadening its scope to include fresh food, health and education.

To do that he wants community and political backing.

Relying more on indirect taxes such as the GST, rather than income and corporate taxes is one of the issues raised in a discussion paper about tax reform released by the government ahead of a white paper later in the year.

"We will prosecute a case for change in various areas for tax, but ultimately we need to get to a policy outcome," Mr Hockey said on Monday.

The treasurer is meeting with his state counterparts in two weeks when he will invite them to discuss changes to the GST, a task he admits will be difficult.

"Now there are no state elections, maybe, just maybe, we can have a fair dinkum discussion about the best interests of the nation without having parochial interests at play," he said.

And if they reject change?

"That's it, end of story," Mr Hockey said.

Assistant Treasurer Josh Frydenberg is making the case for change by using an unconventional example of how the GST works.

The tax applies to pizza, but not to the pizza rolls a baker sells because they're regarded as fresh food, he says.

Labor immediately ruled out support for increasing the GST rate or broadening its base.

"It's lazy just to say the only tax reform worth doing is increasing the GST or broadening the base," shadow treasurer Chris Bowen said.

Greens leader Christine Milne is disappointed the conversation is starting with the "regressive GST" instead of taxing "the bads" of pollution and mining.

"That's where the big end of town wants to start because it doesn't want the focus on that fact that it's not paying its way," she said.

The group representing chartered accountants says additional revenue from the GST could fund personal income tax cuts and the scrapping of inefficient state taxes.

Source AAP

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