Turnbull points to problems in raising GST

The Prime Minister says the government is continuing to look at all proposals “very carefully”.

The departments of Finance and Treasury get their turns on Tuesday and Wednesday.

Prime Minister Malcolm Turnbull has said the budget will contain the government’s tax policy, and questioned whether the benefits of increasing the GST would be worth the difficulties of doing so.

A senior Liberal senator said he would not support increasing the GST to 15 per cent.

“With the GST income tax swap proposal, it has not yet passed that first test and that’s what the analysis is being undertaken”.

“If you are going to reform away from the dependence on high personal income tax, and company tax and all these counterproductive state stamp duties and payroll taxes, you have to have a broad reform, that’s the point I was making”.

He said at this stage he was not persuaded a GST increase would encourage economic growth.

Senator Ian Macdonald said he was one of the few members of parliament who was around when the 10 per cent GST was introduced in 2000.

Shadow treasurer Chris Bowen says the Liberal Party is at war with itself over a possible increase to the GST.

“I won’t be supporting it, and the main reason is that those of us who are there at the time gave a rolled gold commitment that we would not be part of any increase beyond 10 per cent”, he said.

Business Council Of Australia chief executive Jennifer Westacott’s concern comes after Prime Minister Malcolm Turnbull said he’s not convinced of the benefits of a rise in the consumption tax.

Cabinet Secretary Arthur Sinodinos believes, as a popular prime minister and great communicator, Mr Turnbull has the best opportunity of any leader in a long time to make the GST change.

But the prime minister and the party room have to be “excited about this”.

The government’s May budget will effectively be a tax white paper but there will also be announcements between now and then, he said.

Federal Nationals MP Michelle Landry became the latest Coalition figure to publicly come out against the idea of a GST rise on Friday.

Ministers have told the ABC it would be sensible to officially end the debate around the GST soon, but that tax reform would still have to be delivered in the federal budget in May.

‘Clearly there has been a lot of discussion out there.