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Australian Treasurer calls on states to approve increasing goods, services tax

Xinhua, July 15, 2015 Adjust font size:

Australia's Treasurer has asked state and territory leaders to enter "sensible and mature" discussion regarding the federal government's plan to increase the goods and services tax (GST) by up to 50 percent.

Joe Hockey delivered a speech in Melbourne on Wednesday, calling on the states to keep an open mind about raising the GST from 10 to 15 percent of all goods and services, before they meet with the prime minister at a summit in Sydney next week.

The GST was introduced by the Howard Liberal government in 2000 as a replacement for the existing sales tax system, but Hockey said times have changed since its introduction and the taxation system had to keep with the times.

"With all of the premiers and chief ministers meeting with the prime minister next week at the leaders' retreat, there is a real opportunity for a constructive discussion about reforming our federation," Hockey said on Wednesday.

But he maintained that no reform would happen without the full support of the states and territories, but stressed that tax increases needed to be exercised.

"When it comes to the GST, let me be very clear: no change will be considered without the unanimous agreement of state and territory governments and bipartisan support in the Federal Parliament," Hockey said.

Some states are staunchly against the premise, with Victoria's Labor premier Daniel Andrews categorically denying he would support any changes to the GST, which he described as being already "brutal." He said that it would only widen the gap between the rich and poor.

"It's a brutally efficient tax but it has no regard for a person's ability to pay," Andrews told the Australian Broadcasting Corporation (ABC) on Wednesday.

"On that basis I'll be very clear -- Victoria will not support fundamental changes to the GST."

"I'm happy to have a rational, important discussion about this, but our position is very clear. We're not having it jacked up to 15 percent (from 10 per cent) and we're not going to be having it on food and the basics of life."

State and territory leaders will meet with the prime minister and chief federal ministers in Sydney next week, with the broadening of the GST expected to be a main talking point. Endi