Business push for rise in GST

RAISING the goods and services tax would be in Tasmania's best interests, and it's time to have the conversation, according to economists and industry groups.

Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said increasing the GST from 10 per cent could help remove state taxes such as payroll tax and land tax.

"It does make sense to look at GST as a way of getting rid of those taxes which don't seem to make sense anymore," he said.

Mr Bailey said it was time to have a community discussion about what services were expected from government, flagging the cost of health increasing globally at about 8 per cent a year.

"It's time to look at GST as a way of paying for it," he said.

Due to Tasmania's small population, the state relies heavily on its share of the national GST distribution.

"This isn't just a cash grab for Tasmania, this is a discussion about our expectations of what government provides," Mr Bailey said.

Mr Bailey said any increase would need to result in benefits to the state, such as new infrastructure, health and education.

"It's not good enough to increase it to just to keep bureaucracy going," he said.

Economist Saul Eslake said as long as the GST distribution was not changed, Tasmania's economy would benefit significantly from a GST increase.

"It is certainly in Tasmania's interest for the GST to go up," Mr Eslake said.

The comments come as Australia's top Treasury official Martin Parkinson called for an expansion of the GST during an address at the Sydney Institute on Wednesday.

Mr Eslake said while the federal government was bound by its promise not to increase the GST, the case could be made at the next election.

Mr Eslake said most European countries had a GST between 17 and 25 per cent.

"Of the countries that have GST, ours is very much at the lower end," Mr Eslake said.

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