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Prime Minister Malcolm Turnbull has begun talking up the problems with raising the GST in a sign his appetite for an increase could be waning.
In a radio interview on Friday, the Prime Minister spent a good deal of time listing the pitfalls and drawbacks of raising the GST to 15 per cent.
If the government was to raise the consumption tax to provide income tax relief it would also need to increase pensions, craft a complicated compensation program and make sure the country was getting a "a growth dividend that justifies the trouble and expense", he said.
He also said the states and territories should increase their own taxes if they want to raise more money for schools and hospitals.
State leaders like NSW Premier Mike Baird and South Australian Premier Jay Weatherill - who are both advocating for a GST rise - must be prepared to go to their citizens and propose changes to payroll and land taxes, he said.
"The states have got themselves into a way of thinking that every time they need more money, they just go to the ATM of the federal government," Mr Turnbull told Adelaide radio Station FIVAaa on Friday.
It was up to the states to do the "heavy lifting" to get "the maximum health bang for the taxpayers' buck", he said.
Mr Turnbull is under increasing pressure from within his ranks not to touch the GST as the tax reform debate rages on but the Prime Minister is still refusing to explicitly rule out a rise.
The Prime Minister says the government is continuing to look at all proposals "very carefully". The government's May budget will effectively be a tax white paper but there will also be announcements between now and then, he said.
The Abbott government commissioned a tax white paper in 2014. After a series of delays, the final document had been due for release in December last year. But Mr Turnbull pushed back the process shortly after he became prime minister.
He reiterated the government does not want to raise more tax overall, but rather find a more efficient tax mix that drives jobs and growth.
Federal Nationals MP Michelle Landry became the latest Coalition figure to publicly come out against the idea of a GST rise on Friday.
"I'd prefer to see the GST stay as it is and maybe look at some other avenues with the tax reform," she told ABC radio.
