Ian Macdonald and Dean Smith join Government backbenchers calling for broader GST

Updated

The growing number of Federal Government backbenchers calling for a broadening of the GST has prompted the Opposition to label it an "orchestrated campaign" for changes.

Queensland LNP senator Ian Macdonald and West Australian Liberal senator Dean Smith have joined their colleague Dan Teehan in speaking out in favour of expanding the base of the Goods and Services Tax.

Senator Macdonald said a GST that covered fresh food was the original policy put to voters by the Howard government but it had to be scaled back to win Senate support.

"We went to the election in 1998 on the basis of a broad-based consumption tax. I believe it was appropriate then. I think it's appropriate now," Senator Macdonald told ABC radio.

"It will provide more revenue for the states – it will also make the collection much simpler."

Senator Smith has advocated for changing the way the GST is distributed between the states to a per capita model.

He said that should be the Government's top priority, followed by broadening the base of the tax.

Senator Smith acknowledged concerns raised by farmers and welfare groups about applying the GST to fresh food but that it could be something that was covered in the Government's tax review.

"I do think that, after that examination, we will probably discover, if we haven't already discovered it, that having exclusions creates for an inefficient tax system," he said.

GST push an orchestrated campaign: Labor

Acting Opposition Leader Tony Burke said he suspected there was an "orchestrated campaign" to change the GST.

"When you get the third person coming out flying a kite about changes for the GST ... this is not a few rogue members of Parliament acting alone," Mr Burke told reporters in Canberra.

"This is an orchestrated campaign that the Prime Minister and the Cabinet would be fully aware of."

But deputy Liberal leader Julie Bishop reiterated the Prime Minister's pre-election commitment that there would not be changes to the GST in the Coalition's first term.

However she did endorse the right of MPs to speak out as the Government prepares to announce further details of its taxation review.

"I certainly support MPs putting forward ideas," she said.

"We should have a constructive and mature debate about our taxation system and that will include the GST."

Senator Smith suggested the GST could be gradually expanded to cover more items but he said he was firmly against increasing the rate from 10 per cent.

He wrote in the Australian Financial Review that a voter told him recently: "Every Australian knows that a GST rate rise is like crack: do it once and you guys are hooked."

"The suggestion was that looking at only the tax rate or changing the tax rate had an addictive quality about it for politicians," he later told ABC Radio.

"That is a view I think many Australian electors share."

Topics: tax, government-and-politics, federal-parliament, federal-government, federal---state-issues, australia

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