Morrison talks to state treasurers about GST changes

STATE treasurers will consider wide reforms to the GST and state property taxes when they meet with federal counterpart Scott Morrison today.

The talks will examine a range of tax reform options modelled by Treasury for the Federal Government at the states' request.

Raising the GST to 15% and broadening its base to include water and sewerage charges, non-alcoholic drinks and food could reap an additional $45 billion to be shared by the states.

Another modelled proposal is raising the Medicare levy to 4%, reaping $15 billion for Canberra's coffers, and raising the GST to 15% but not changing what it applies to.

Mr Morrison was adamant on Wednesday that any changes to the GST would have to come with reforms to state property and payroll taxes.

He reiterated his previous comments that the Federal Government would not consider any changes until all states and territories had agreed on a proposal.

That caveat may kill any real prospect of wide reform as Queensland and Victoria back a Medicare levy hike to raise revenue, while South Australia and New South Wales prefer changes to the GST.

Mr Morrison also rejected reports the modelling was "secret" and insisted the government was trying to have a genuine debate with state governments.

"News flash, the Commonwealth is having a discussion with the states and territories about how we make our tax system better," he said.

Leaked on Tuesday, the modelling includes five GST reform options and two potential Medicare levy changes.

Federal Labor's rejection of any change to the GST will complicate the debate, which is likely to be a crucial issue in the lead-up to next year's federal election.

The treasurers' meeting precedes Prime Minister Malcolm Turnbull's first official meeting with all state premiers on Friday, when tax will again be a topic.



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