Scott Morrison flags concerns about adding GST to health and education

Scott Morrison flags concerns about adding GST to health and education

Scott Morrison flags concerns about adding GST to health and education

Updated 25 January 2016, 6:35 AEDT

Federal Treasurer Scott Morrison signals his concerns about expanding the goods and services tax to include health and education, but says the Government has not made any decisions about potential changes.

Federal Treasurer Scott Morrison has flagged concerns about expanding the goods and services tax to include health and education.

The Government is considering changes to the GST as part of its review of the tax system.

There have been calls to lift the GST rate to 15 per cent and to broaden its base to include more services.

Modelling from the Parliamentary Budget Office last year found scrapping the GST exemptions for health and education would deliver $6.4 billion and $4.9 billion respectively in additional revenue per year from 2017-18.

Mr Morrison told Sky News the Government had not made any final decisions about potential changes.

"The issues that were present back when the GST was introduced around health and education are still there today," he said.

"They weren't not put on the GST because of the Senate at the time; it was actually a policy decision of the government.

"And so if the Government were to go down that path you would be looking at the same fundamentals, but right now the issue is not the GST; the issue is, what are you trying to achieve?

"What we are trying to achieve is higher rates of growth, of job growth in particular, and how is the tax system actually stopping people who are actually out there backing themselves, achieving the goals they want to achieve?

"Personal income tax rates are a blocker to that, company tax rates are also a blocker to that."

The Government is working on a tax white paper canvassing possible changes to personal and corporate tax arrangements.

Mr Morrison said he would not be rushed into making announcements about any proposed changes to the tax system.

"There are a number of key statements along the way between now and the election," he said.

"There's a budget which I'm looking forward to bringing down later this year and obviously there are a range of opportunities all the way throughout the year for these to be articulated and worked through."

However, Labor treasury spokesman Andrew Leigh said the Government should end speculation over a potential GST rise by ruling it out.

"We've seen in Australia, struggling growth rates with growth downgrades ever since this Government was elected," he said.

"We've got inequality now at a 75-year high. The last thing we need is an increase in a regressive tax like the GST that would hurt household consumption."

The Treasurer dismissed the suggestion an election could be called before a May budget.

"We're not talking about elections, we're talking about the economy and policy changes that need to take place," he said.

"That's what we're focused on — we're focused on jobs. I think Australians are really wanting this kind of stable Government."