Senate crossbench and states are Morrison’s GST hurdles

THE Turnbull government will be forced to negotiate a tough new 15% GST through the Senate crossbench, if it decides to go ahead with the proposal.

While Treasurer Scott Morrison on Monday distanced himself from the 5% rise on the 10%, he said it was an option being considered.

The proposal came from modelling by the Parliamentary Budget Office ordered by Nationals backbencher David Gillespie.

Dr Gillespie told the ABC on Monday he believed more needed to be done to reform tax, so he "got off my backside" and asked for the modelling.

The modelling showed that if Australia adopted a New Zealand-style GST, it could raise $130 billion for government coffers.

Mr Morrison said he supported Dr Gillespie's efforts, but said any changes would be up to talks with the states and territories.

He said he thought the proposal was at the "extreme end of the options", but the government wanted to fix the tax system to "back people who are out there saving and investing".

But the government will face a tough battle getting reforms through the states, which each rely on the tax revenue to fund services, as well as the diverse interests on the Senate crossbench.

Mr Morrison did not comment on whether the government would consider raising the GST level, or widening what it applied to, or both.

Labor leader Bill Shorten ruled out supporting any changes to the GST, instead saying the government should act on multinational tax avoidance and superannuation to raise revenue.

The Greens' Adam Bandt said they would "fight tooth and nail to stop any GST increase".