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Liberal Senator Dean Smith calls for GST to be increased from 10 percent to 12.5 percent

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Prime Minister Scott Morrison has shot a call from one of his own backbenchers to expand the tax on goods and services.

West Australian liberal senator Dean Smith has challenged the Morrison government to broaden the GST or raise the rate to 12.5 percent in exchange for eliminating state-based payroll taxes.

& # 39; Well, we don't do it, & # 39; Mr. Morrison said to reporters in Sydney on Monday.

The prime minister worked out later.

& # 39; People know that we actively considered this some time ago, we investigated it very carefully & # 39 ;, he told Sky News.

& # 39; The sad truth was that you had to spend something like that on half of what was actually collected to compensate for the execution of the tax.

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& # 39; So the numbers were wrong at the end of the day. & # 39;

Mr. Morrison indicated that any changes to the GST should be made public.

& # 39; The Australian people should have an opinion on that, so it is not on the agenda, we are not doing it. & # 39;

Senator Smith has encouraged state and territorial treasurers to lobby with their federal counterparty to support the & # 39; politically brave & # 39; tax recovery.

& # 39; They could give up their call for an increase in infrastructure spending and increases to Newstart and instead stay united in a call for tax reform, which starts with the abolition of wage tax in exchange for a broader consumption tax, & # 39 ; he wrote in the Australian Financial Review.

He says payroll tax hinders economic activity and & # 39; is ultimately paid by employees through lower wages and higher prices for consumers & # 39 ;.

& # 39; Compensating state and territories for lost revenue can be achieved by widening the GST or by a modest (but politically brave) lift in the GST from 10 to 12.5 percent & # 39 ;, he wrote.

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Opposition leader Anthony Albanese warned that raising the GST would affect pensioners and families.

"This is a government that never misses an opportunity to hurt working people and to distribute income among those who can least afford to pay more," he told reporters in Perth.

& # 39; The GST is by definition a regressive tax because it affects people at the same rate regardless of their income. & # 39;

In the meantime, the watchdog overseeing the Australian tax office is launching an investigation into a $ 7 billion burst of unpaid taxes.

Tax Ombudsman Karen Payne wants to understand why the total undisputed tax debt has risen from $ 19.2 billion to $ 26.2 billion in the last four years.

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& # 39; What does it accumulate in the system? Is it in large companies, small companies or other specific sectors within the economy? & # 39; Mrs. Payne told the Australian.

& # 39; We want to try to understand whether there are certain taxes to which it is linked – GST, income tax, CGT (capital gains tax) or BAS type (business activity statement).

& # 39; And then use that scoping study to make a better and more focused, deep dive. & # 39;

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