Treasurer Scott Morrison confirmed on Wednesday that the government has transformed the Goods and Services Tax (GST) policy on the basis of the request made by the states and territories.

Morrison will be meeting his state counterparts on Thursday to discuss the tax system and decide if the excess of state and federal taxes need to be put to halt. Another meeting with state and territory leaders along with Prime Minister Malcolm Turnbull will be held on Friday where six alternatives to increase the GST will be discussed in addition to two options to amend the Medicare levy.

The documents from the Council of Australian Governments contained the modelled Treasury changes being taken into consideration. There are a total of eight suggested changes as mentioned above. One of the options is to increase the GST to 15 per cent, hiking the revenue to $45 billion a year. This is expected to help strengthen the foundation for GSTs applied on food, non-alcoholic drinks and beverages

Morrison said that the federal government was reconsidering tax changes, including the hike of 15 percent, which was “hypothetical” at the moment. “The States and Territories asked the Commonwealth to provide them with information on what the implications and costings were on consumption tax changes. That’s what the Commonwealth has done - there’s no secret about that,” Morrison told reporters in Melbourne.

He said that no decision on tax changes has been made, but the modelling has come as suggestions from premiers and chief ministers few months ago. The reform suggestions include (via the ABC) :

  • increasing GST to 15 per cent while maintaining the current GST base,
  • increasing GST to 12.5 per cent and extending the current limit to food and non-alcoholic beverages,
  • increasing in GST to 15 per cent and extending the limit to food, beverages, water and sewerage, and
  • increasing the rate of Medicare levy from 2 per cent to 4 per cent.

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