Boost GST and use funds to cut tax, OECD says

Boosting Australia's "currently low" rate of GST and using the funds to cutting income and company tax would be one of the best ways to boost economic growth, the Organization for Economic Co-operation and Development says.

The suggestion, in the fund's latest "Going for Growth" report, comes as the government continues to sit on the tax discussion paper it had planned to release in December.

That 200-page paper canvasses arguments in favor of lifting or broadening the GST in return for tax cuts elsewhere. It was to have been used to encourage public submissions to help the treasury prepare the tax white paper due in December.

Unlike the Rudd Labor government that declared the GST off limits when it set up the Henry Tax Review, the Abbott government imposed no restrictions, while promising that any changes to the GST would need the agreement of the states and would be put to voters before being adopted.

The OECD says Australia's consumption taxes are "relatively low" while its personal and business tax rates are high. It calls on the government to cut company tax "as part of a wider reform that also envisages raising the currently low rate of goods and services tax". It has previously said the GST could be raised to between 15 and 18 per cent

The report also calls on the government to ensure that planned spending on road infrastructure delivers value-for-money and addresses environmental concerns through user and congestion charges.

It says Australia's educational inequalities are relatively high compared to the OCED average and commends the so-called Gonski school funding formula that delivers money to schools on the basis of need. The Coalition has committed to support the Gonski formula only until 2018, setting aside no money for it after that.