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Business and community groups have come together to implore Australia's state and federal leaders to take politics out of the discussion on tax reform as they prepare to gather for Prime Minister Tony Abbott's retreat in Sydney on Wednesday.
As NSW Premier Mike Baird sparked furious debate with a proposal to increase the GST rate to 15 per cent, the groups called for the tax reform debate to be held "in an open, inclusive and transparent way that does not rule out options because it is politically expedient to do so."
"Reform will only happen if our political, business and community leaders take the long view and put the national interest first," they say.
Releasing a set of "key messages" for tax reform, the Australian Chamber of Commerce and Industry, Australian Council of Social Service and Business Council of Australia say all options should remain on the table and that "no change" is not an option.
They argue that the case for reform is "compelling" and that the tax system "must be assessed as a whole".
Australia's leaders should "work towards a tax system that raises the revenue governments need to provide services to the community in a way that supports a stronger economy and job creation, and is fair".
ACOSS chief executive Cassandra Goldie said Australian could no longer afford to avoid serious tax reform.
"If we postpone it until governments really do face a budget crisis the choices will be a lot tougher," she said.
"Experience shows us that tax and budget reform can be achieved, but it will require a degree of vision, consensus and bipartisanship, starting with our political leaders."
BCA chief executive Jennifer Westacott said the agreement between the business and community groups on the core principles for tax reform "provides our political leaders with a solid platform of consensus and support to take things forward".
The call comes after Mr Baird's proposal to lift the rate of the GST to 15 per cent in response to federal government cuts to health and education funding worth $80 billion over 10 years.
He ruled out broadening the base of the GST to fresh food and education and suggested the impact of the rate rise on lower income families and the vulnerable could be addressed via income tax and the welfare system.
The proposal received praise from Mr Abbott, while South Australian Premier Jay Weatherill welcomed the discussion about raising the GST rate.
But Victorian Premier Daniel Andrews repeated his strong opposition to any increase in the GST and Queensland Premier Annastacia Palaszczuk said she was "open to a discussion on tax reform" but that did not extend to an increase to the base or rate of the GST.
Mr Abbott has said changes to the GST will only occur with the unanimous support of states and territories.
Shadow treasurer Chris Bowen attacked Mr Baird and Mr Abbott over the proposal.
Mr Bowen said Mr Baird had "capitulated" to Mr Abbott's plan to force the states to the table on GST reform by cutting $80 billion in health and education funding.
"Mike Baird can do that if he wants to, but the Labor Party will stand consistently against increasing the GST," Mr Bowen said.
"This is not a policy that we support or will support, and clearly other premiers and state treasurers have made the case they will not support it either."
NSW Opposition Leader Luke Foley said Mr Baird "hasn't stood up to his friend Tony Abbott" on the federal cuts.
"Rather than fighting for NSW's fair share, he now proposes the lazy solution of increasing the rate of GST."
Mr Baird echoed the sentiments of the business and community groups in a video he released on Monday to accompany his GST proposal.
In it, Mr Baird said he was "sick of politics in this country. Point scoring, fear, smear, who wins the daily news cycle."
He said the community wanted politicians to deal with the problems "in their interests, nothing else".
The comments were welcomed by Iain Walker, executive director of the New Democracy Foundation, a think tank dedicated to exploring new forms of community engagement in public policy.
Mr Walker said the group was "ecstatic" to hear Mr Baird's comments.
"The effect I hope it has is that it becomes acceptable to talk about innovations in our democracy," he said.
Ms Westacott said Mr Baird was "demonstrating the sort of leadership we're calling for, which is to call an issue out, communicate it honestly and say, there's no escaping."
