Prime Minister Malcolm Turnbull is considering a possible rise in the GST rate as part of a broader package of tax reform the Coalition will take to the election.
But the prime minister has yet to say whether the GST will rise from 10 per cent to 15 per cent.
Veteran Liberal MP Russell Broadbent, who lost his seat in 1998 when John Howard campaigned for the GST but later returned to parliament, said the idea of an increase in a tax that everyone pays “doesn’t go down very well”.
“I don’t think it raises that much money anyway and the compensation you would have to pay sort of ameliorates all the benefits you would gain,” Broadbent told Sky News on Thursday.
He also had concerns that the money would go to states, which had surplus budgets, while the federal government was dealing with deficits.
While he rejected reports of a backbench “revolt” against the GST rise, he said all MPs were pushing for a “holistic package” they could sell to voters.
“I think it is really important that the GST is … addressed by the prime minister and if they think they can have a package that will benefit Australia in the long term then so be it and I will support them,” Broadbent said.
Liberal senator Cory Bernardi, who is opposed to raising the GST, said there might be a short-term benefit, but in the long term everyone would be paying more tax.
“I think it would be folly for the government to do it, because I think electorally it’s unpopular but, two, it does increase naturally the size of government,” he told ABC TV.
Bernardi said he had spoken to some of his upper house colleagues about the issue.
“To paraphrase Malcolm Turnbull’s words, there’s never been a better time to be a backbencher because we can make a contribution to the policy debate,” he said.
Northern Territory Coalition MP Natasha Griggs, who has a marginal seat, admits some are daunted by a community backlash.
Trade Minister Andrew Robb said MPs understood nothing had yet been decided and reports of a revolt were “a beat-up”.
Cabinet colleague Peter Dutton said all would be revealed in good time.
“These things will be fleshed out in due course,” he told ABC radio.
Shadow treasurer Chris Bowen said the government’s tax reform agenda was in chaos.
“How would (Treasurer Scott Morrison) compensate people who are not in the tax system and not receiving government payments?” Bowen said.
“I look forward to seeing that.”
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