Coalition Senator Ian Macdonald calls for GST on fresh food as former Victorian premier John Brumby calls for GST increases

AS if Australians aren’t facing enough tax hikes and cuts, now a senior Coalition MP wants the GST to be broadened to include fresh food.

Generic photo of basket of groceries, with some items GST free. Food Grocery Shopping Supermarket.

A SENIOR Queensland Liberal Senator has called for the GST to be applied to food in order to raise more revenue for the states.

In Brisbane for a Senate inquiry, Senator Ian Macdonald said he would not support raising the GST above 10 per cent but he did believe the tax should have a “broader base”.

“The original proposal was a GST on everything. After the deal with the Democrats (in 1999) food and some other essential services were removed,” he said.

“We need to make the Australian public aware of what was the original proposal, and there were compensations for it ... and I think we should go back to that proposal.”

Former Victorian premier John Brumby wants state and territory leaders to make the case for a change to the tax, in the wake of a row over federal budget health and education cuts.

Conceding it would be a “courageous” move, Mr Brumby argued an inevitable hike looks to be “the best option” to increase revenue.

“The real debate is about the nature of the increase,” he said in a speech at Melbourne University.

“Is it base? Is it rate? Is it both?”

Compensation for low-income earners and pensioners also needed to be considered, he said.

Call for GST review ... former Victorian premier John Brumby.

Bill Shorten said Senator Macdonald had “let the cat out of the bag” and was telling Australians what the Abbott Government really wants to do.

“Be very worried, when the Abbott Government says they don’t want to increase the GST. Just remember they didn’t want to cut health or schools, they weren’t going to attack Medicare or increase taxes.”

The Opposition Leader told reporters in Brisbane, Labor would not support any plans to increase the GST, accusing the Coalition of “blackmailing the States”.

Despite the Prime Minister ruling out a GST hike, Senator Macdonald has spoken out about broadening what it applies to.

He wants the Coalition to consider returning to the Howard government’s original 1998 proposal.

“That was a GST on everything with commensurate assistance to those on lower incomes who would be mainly affected by the tax on food and some basic commodities,” Senator Macdonald told ABC Radio.

But unlike Mr Brumby, he remains strongly opposed to increasing the tax’s rate.

“I was around when that was introduced, and I was one of those who signed my name in blood that we wouldn’t increase the rate beyond 10 per cent.”

Back in time ... Senator Ian Macdonald (centre) says he wants the Coalition to consider returning to the Howard government’s original 1998 proposal. Picture: Shae Beplate.

Tony Abbott refused to “speculate” about any GST hike when asked by reporters in Parliament House, insisting it was a matter for the states.

“The GST is a tax which belongs to the states and obviously it’s perfectly within the bounds of possibility for the states to want to discuss the GST,” he said.

Mr Abbott conceded he was part of the Howard government when it had to negotiate on what the tax would apply to.

Fresh food had to be left out as part of an agreement with the Democrats.

“The result was accepted by the government and it has been accepted by the Coalition ever since,” he added.

“My opinion is we pay more than enough tax already and we have got to over time get taxes down,” Mr Abbott told Fairfax Radio this morning.

“I want to see more effective, better-run schools and hospitals because that over time will give us better services and lower taxes.”

Fellow senior government members insist they are not intending on changing the GST.

“That’s not our plan. That’s not our plan at all,” Immigration Minister Scott Morrison told ABC Radio.

“All governments, whether they’re state or federal have to get their houses in order and they have to line up their spending with their revenue,” he said.

State and territory leaders are angered by a decision to rip $80 billion from health and education in last week’s Budget and are calling for an urgent meeting with the Prime Minister.

Originally published as Coalition Senator Ian Macdonald calls for GST on fresh food as former Victorian premier John Brumby calls for GST increases