Oakeshott calls for GST rethink

Key independent MP Rob Oakeshott has called for a mature debate on tax reform, including changing the GST, to maintain the nation's living standards.

Mr Oakeshott said the goods and service tax should be reconsidered in a broad-ranging review of state and federal taxation to help pay for social programs and boost business and investment.

Australia had too many taxes, yet the government's revenue base was eroding, Mr Oakeshott said.

"Unless we do reform with a purpose of a pay-off, we are going to lessen our standard of living for all Australians in the future," Mr Oakeshott told AAP on Thursday.

"And I don't want to be a party to that. I want to be someone who is pushing for the best standard of living for all Australians, so that means an urgent look at the tax mix in our country."

Commonwealth tax revenue in the 10 years up to the global financial crisis was an average 23.4 per cent of gross domestic product (GDP), but it has averaged 21.1 per cent in the five federal budgets since the global financial crisis.

This is a shortfall of about $32 billion a year in current terms.

Among the measures proposed to boost tax revenue is lifting the GST rate from 10 per cent and broadening its base.

The tax covers about 60 per cent of consumption, but it does not apply to areas such as health, education and fresh food.

Mr Oakeshott said he was not on "some GST quest" alone, but rather it was about cutting inefficient taxes such as stamp duty and insurance taxes.

Assistant Treasurer David Bradbury said the government remained opposed to changing the GST.

"We do not support an increase in the rate and we do not support a broadening in the base," Mr Bradbury told Sky News.

Opposition assistant treasury spokesman Mathias Cormann said a coalition government would not change the GST.

Mr Oakeshott said both major political parties were "gun-shy" about tax reform.

Any changes to the GST would require all the state and federal parliaments to legislate.

Removing GST exemptions could add $31 billion to the government's coffers and increase GDP by $20 billion a year, the Grattan Institute has estimated.

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