Swan rejects push for higher GST

The Business Council of Australia made a submission to the Henry taxation review that asks for the GST to be raised from its current level of 10 percent to boost economic growth in these challenging times. Mr Swan however said that an increase in the GST would have a "savage impact on people on modest incomes, and that's why we've ruled it out".

Greig Gailey, BCA head said, "We're not talking about increasing the total tax take; rather, we'd actually see it decline. What we're talking about is changing the way that we tax, so that we tax more the consumption of goods and we tax less the production of goods."

Mr Gailey said that a revision to the GST was required to deal with the budget deficit and rising government debt.

But the Treasurer has firmly rejected the council's proposals.

"We have the Henry review in place, but part of the remit of the Henry review is that we're not considering any increase in the GST at all," Mr. Swan said today.

"What we do want to do is to look at the tax system in total, and we will do that through the Henry review. But we ruled out from day one any increase in the GST."