Both sides reject new call for GST change

The major federal parties have again ruled out making changes to the 10 per cent GST, despite declines in tax revenues which are hurting both commonwealth and state budgets.

Former NSW Liberal premier Nick Greiner, one of the authors of the federal government's GST review handed to Treasurer Wayne Swan last Friday, has called for a reassessment of the way the consumption tax is applied, saying to rule out any discussion was "stupid".

Mr Swan said on Monday he would publish the government's response to the report and discuss it with state treasurers before the end of the year, but he repeated the government's opposition to change.

"We believe the GST, by lifting or broadening the base, would really hit people, particularly battlers really hard," he told ABC Radio from Mexico City, where he is attending the Group of 20 (G20) finance ministers' meeting.

"That is not a priority of this government."

The GST rate has remained at 10 per cent - and does not apply to fresh food, education or health - since it was introduced in 2000 by the former Howard coalition government.

Opposition Leader Tony Abbott confirmed on Monday the coalition had no plans to change the GST rate or broaden its tax base.

"We certainly think the existing system is the system we should stick with," Mr Abbott told reporters in Canberra.

The GST is a key source of revenue for the states and territories and has been undermined by subdued consumer confidence since the 2008-09 global financial crisis (GFC).

More broadly, commonwealth revenues have failed to meet expectations since the GFC, but the government says the budget is still on track to return to surplus this financial year.

Mr Swan on Monday also rejected the prediction by Deloitte Access Economics that a shortfall in Labor's mining tax revenue had sunk the much-promised surplus for this year.

"Deloitte Access Economics doesn't always get it right," the treasurer said.

Speaking in Vientiane, Laos, where she is attending a summit of Asian and European leaders, Ms Gillard said: "We stand by the figures and we're on track to deliver a budget surplus."

Deloitte Access warned that the government's $1.1 billion surplus for 2012/13 was more likely to wind up as a $4.2 billion deficit as growth in China slow and declines in iron ore and coal prices hit annual revenue from the minerals resource rent tax (MRRT).

"In recent months, it's been China that's still hurting the budget bottom line," Deloitte director Chris Richardson said, adding that the MRRT was still a "sensitive" part of the budget calculations.

In October, Treasury wound back its MRRT forecast for this year to $2 billion, from $3 billion.

But it's believed the tax raised zero revenue in its first quarter, opening the way for the Treasury projection to be cut further.

Mr Abbott said the government would "never ever" return a surplus, despite promising one on at least 150 separate occasions, "no ifs, no buts".

He reaffirmed a pledge to deliver a surplus in the first three budgets of a coalition government.

"Of course things take time, but we will do better than this government from day one," Mr Abbott said.

Australian Chamber of Commerce and Industry (ACCI) director of economics and industry policy Greg Evans said he didn't want to see a surplus at any cost.

"We support the notion of returning the budget to balance as quickly as possible, but we don't want to see the economy crunched in order to achieve that," Mr Evans told reporters in Canberra.

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