The Australian Industry (Ai) Group will push for an increase in the goods and services tax (GST) rate in the Oct. 4 and 5 tax forum organized by the federal government.

The group is also open to have a wider application of the GST on more goods and services in exchange for the removal of state taxes. Ai Group wants insurance taxes and conveyancing duties removed, payroll tax to be abolished or amended and land tax improved.

However, the government has ruled out changing the GST, but would rather focus on helping businesses affected by the country's two-speed economy. The government stand is contrary to recommendations by several organizations such as the International Monetary Fund, Organisation of Economic Co-operation and the Business Council of Australia to raise the GST rate from its 10 per cent level.

The topic, however, is considered a hot one because of the lack of consistency of the current GST and the possibility that a hike could lead to the abolition of some state taxes such as insurance, motor vehicle and payroll taxes, and commercial conveyancing duty.

A study by KPMG Econtech found that just by broadening the scope of the GST to include health services, fresh food and education or hiking the rate to 12.5 per cent, 14 per cent or 20 per cent would improve overall standard of living in Australia. The reports explained that lowering the cost of imposing the GST is smaller than benefits from removing inefficient taxes.

The government also said it will not discuss again the mining tax since it has negotiated with three major mining companies. The Ai Group, in a submission, cited problems in the proposed mining tax particularly the failure to remove state mining royalties. The Greens are also challenging the limited scope of the mining tax, arguing that had gold been included it would add $1.8 billion to government revenue over 10 years.

Almost 200 people are expected to attend the tax summit, including representatives from business, unions, community groups, and state and federal politics.