LIFTING the rate of the GST or broadening its base and ­relinquishing responsibility for health and education to the states are some “options” Tony Abbott has floated in private talks with key Senate ­independents.

The Sunday Telegraph can reveal that Mr Abbott also confirmed that any GST ­increases after the next election, which would require the agreement of the states, would also include tax cuts to compensate pensioners, families and low income earners.

While Mr Abbott has called for a “mature debate’’ on federal-state relations and the GST, his private ­discussions with independents over wine and steak in the Prime Minister’s suite were more candid than his public commentary.

Liberal Democrats Senator David Leyonhjelm has confirmed that Mr Abbott raised the GST reform with him at a recent dinner, prior to his ­recent Tenterfield address on federalism.

“He mentioned he had to give a major speech and ­floated his idea of broadening the GST and that the money raised would be enough for the states to pay for health and education. There would be a corresponding fall in other taxes,” he said.

Old Treasury modelling commissioned by Labor has suggested that raising the GST to 12.5 per cent would hit a two-child family with costs of up to $205 a fortnight without tax cuts to compensate.

Mr Leyonhjelm said the Prime Minister “wasn’t 100 per cent committed to his GST broadening idea. He was floating it as an option.

“He is quite interested in the idea of the Commonwealth essentially withdrawing from funding delivery of health and education and making the states responsible,” he said.

A spokesman for the Prime Minister’s office confirmed that he had dinner with a number of senators and did not dispute Mr Leyonhjelm’s recollection of the GST issue. “The Prime Minister has called for a mature debate on reform of the federation — naturally it raises issues like the GST and health and education — but starting the ­process and proposing change are two very different matters.”

Victorian Premier Denis Napthine, who will face the polls on November 28, has ­attempted to hose down talk of the GST hike as has Queensland’s Campbell Newman.

Labor leader Bill Shorten said the government was ­attempting to blackmail the states into increasing GST.

Originally published as Pay less tax, pay lot more with GST