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Tax reform stalls as Labor rules out GST changes

A key plank of the Abbott Government's tax White Paper appears stillborn, with Labor immediately ruling out any change to the GST.

Just hours after the discussion paper for the eventual White Paper was released, the ALP made clear it would not back either a lift in the GST rate or broadening the tax to goods such as fresh food.

The GST forms a key part of the discussion paper that was officially released yesterday.

Treasury argues Australia's 10 per cent is low by world standards, is an efficient tax and also difficult to avoid. Changing the GST would make space to cut other taxes, particularly company and personal income taxes, it said.

But shadow treasurer Chris Bowen said the ALP would not back any changes, arguing it was a "lazy" approach to focus solely on the GST.

"We don't support the increase in the GST that the report also makes it clear the incidence on low- income earners," he said.

"We don't support broadening the base to things like fresh food. We want people eating food which is healthy for them."

The Government also distanced itself from any GST reform, making clear there needed to be unanimous support from the States and Territories as well as across the political divide.

Prime Minister Tony Abbott effectively tied any change of the GST to Opposition Leader Bill Shorten.

The comments were immediately decried by the business community, which sees a change to the GST as pivotal to wider tax change.

Australian Chamber of Commerce and Industry chief executive Kate Carnell said future taxpayers would be hit if the GST was not open for discussion.

WA Treasurer Mike Nahan said the State was unlikely to make a submission on the discussion paper and reiterated the Government's stance on any change to the GST.

"We would not consider any move to change the rate or base of the GST before the flawed distribution model is rectified," he said.

Meanwhile, there may be scope to change superannuation concessions which, last year, cost Federal coffers almost $30 billion in revenue.

The discussion paper canvasses concessions in super and how they mostly flow to high-income earners.

Association of Superannuation Funds chief executive Pauline Vamos said though the discussion paper recognised the reason for the concessional tax treatment of super, there was a need to review those concessions.