Treasurer Scott Morrison has labelled a Government MP’s suggestion to raise the GST to 15 per cent and dramatically broaden its base as “extreme”.

The Parliamentary Budget Office (PBO) has evaluated the New Zealand-style system and found it would raise $130 billion in 2017-18, including additional revenue of $65.6 billion.

New South Wales Nationals member David Gillespie said he asked the PBO for modelling after it was suggested by constituents.

But Mr Morrison distanced himself from the idea, saying it was at the far end of the tax debate.

“David’s been consulting with his community, he’s made a suggestion today, he’s put that in,” Mr Morrison told Macquarie Radio.

“It’s … at the pretty extreme end of the options you can technically consider, but that said at least he’s part of it and he’s having a contribution.

“What we want to do is fix a tax system that actually isn’t backing people at the moment who are out there working and saving and investing.”

The current 10 per cent GST has a range of exemptions, including basic food, health and education services, but in New Zealand, it covers a much larger share of consumption.

“They have it applying to about 97 per cent of consumption in their country and we only have it on 47 per cent,” Dr Gillespie told the ABC’s AM program.

“It’s not part of a coordinated program; I just got off my butt and did this myself, because I want my people in the Lyne electorate to get their voices heard in Canberra.”

Shorten vows to fight any GST hike

The Federal Opposition is downplaying the budgetary impact any additional GST revenue would create.

“When the Government makes all these promises about the GST, what they say is we’re going to pay for hospitals and schools, we’re also going to hand back income tax cuts and we’re also going to compensate people,” Labor leader Bill Shorten said.

Tough decision for Bill Shorten

A popular Prime Minister leading a party praised for its economic management wants to have a national conversation about expanding the GST. This leaves the Opposition Leader in an invidious position, writes Paula Matthewson.

“You’ll find that this money doesn’t stretch very far with all those marvellous promises being made by the Government.”

Mr Shorten vowed to fight the Government on the GST at the next election if the Government moved to increase or broaden the tax.

“Because where does this money come from? It comes from the pockets of working people,” he said.

“Fifteen per cent every time you go to the supermarket or you pay the doctor’s bill or you go to hospital.

“The people who pay this are the people who are going to work every day and battling to make ends meet.”

Source: ABC News