GST and state funds sharing in line for debate

PRIME Minister Tony Abbott has called for a "mature debate" on the structure of Australia's federation, including potential changes to the GST.

Mr Abbott on Sunday strengthened his calls for the debate, including considering how states that contribute the most to federal coffers can more fairly share in the benefits.

His call was welcomed by Queensland, Western Australia and New South Wales, but Victoria and South Australia raised concerns.

Labor leader Bill Shorten asked Mr Abbott during Question Time on Monday when he would "break his promise that the GST is not going to change".

While Mr Abbott had previously ruled out increasing or widening the GST base through the government's taxation review, the government's federation white paper would create a new platform for the long-divisive debate.

Mr Abbott said in parliament he believed it should be possible for the federal parliament to have a "mature debate" about the GST as part of the federation reforms.

His comments follow new research by the Centre for Economic Development of Australia that recommends the creation of a new national council for federation reform to lead the process.

However, the research also warned against the political perils of GST reform, and the need for all states and territories to agree on any changes, in that the Commonwealth "cannot alone decide the fate of the GST".


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