New South Wales Premier Mike Baird.
New South Wales Premier Mike Baird. LUKAS COCH

NSW Premier calls for GST to be 15%

NEW South Wales Premier Mike Baird has been both praised and accused of "putting lipstick on a pig" for his call to increase the GST to 15%.

Mr Baird announced his support for raising the goods and services tax rate from 10% to 15% to help under-funded state health systems.

"In 15 years from now, we face a $35 billion funding crisis that threatens to end healthcare as we know it," he said.

"This week, as the Premiers and PM gather, I'll be proposing increasing the GST to 15% with all the extra revenue going to healthcare and compensating lower income earners so they are no worse off.

"It won't be popular. But tough decisions rarely are."

Prime Minister Tony Abbott will join premiers and chief ministers from each state and territory tomorrow for a leaders' meeting on federal-state relations.

He commended Mr Baird for his "very sensible" decision and called on other leaders to give the matter serious consideration.

Speaking at a joint media conference beside Mr Baird in Sydney, Mr Abbott said: "What we have today is a very sensible proposal from the NSW Premier following on from the sensible suggestions from the South Australian Premier."

SA Premier Jay Weatherill on Monday went against Labor's party line and gave conditional support to Mr Baird's 15% GST proposal.

But Victorian Premier Tim Pallas told ABC his state would fight any increase.

He said compensating low income-earners was "just putting lipstick on a pig".

"Each and every state has the right, of course, to veto adjustments to the GST and we intend exercising that veto as far as it goes to broadening the scope of goods that could be incorporated in the GST or indeed broadening the GST rate," he said.

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