I'd consider backing GST rise from 10 to 15 per cent: Luke Foley

Opposition Leader Luke Foley says he would consider supporting an increase in the GST from 10 to 15 per cent as long as the funds were used solely for health and education and to compensate low-income earners.

In an interview marking one year since his election as NSW Labor leader, Mr Foley lambasted suggestions the extra money could be used for income tax cuts as well as plugging a shortfall in health and education funding to the states as a result of cuts in the 2014 federal budget.

Premier Mike Baird and Treasurer Gladys Berejiklian have proposed lifting the GST to 15 per cent to cover the estimated $80 billion health and education funding shortfall plus compensation for low income earners.

But federal treasurer Scott Morrison insists any potential GST increase must also be used to fund income and company tax cuts

"A GST increase has become a magic pudding for every vested interest going," Mr Foley said.

"So we hear that if we just bump up the GST from 10 to 15 per cent we can compensate lower income people, deal with bracket creep, cut income tax, cut corporate tax, cut inefficient state taxes such as stamp duties.

"And there'll be money left over to give the states for health and education? Well no, there won't be."

However, Mr Foley said he would consider offering Mr Baird bipartisan support for his model if strict funding guarantees were in place.

"If an increase in the GST would do two things – firstly, compensate people on lower incomes hit hardest by such a rise, but secondly, the revenue gains were ploughed purely into health and education provision by the states, well of course I'd look at it," he said.

"But I don't see any willingness for that from the conservative side of politics. I hear them talking about a range of tax cuts rather than increased serviced delivery for our public health and education systems."

Mr Foley has previously derided an increase in the GST to 15 per cent as "lazy" and said state governments should raise extra money by agreeing to set taxes at the same rate to eliminate the competition among them that erodes all their revenue bases.

The story I'd consider backing GST rise from 10 to 15 per cent: Luke Foley first appeared on The Sydney Morning Herald.

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