"There needs to be more grunt to the argument being made than just putting the hand out and saying it should come to us first," Mr Tehan said.

"Just calling for their share of a rate increase, I think, lacks intellectual rigour."

PROPOSALS

Treasury is actively working on developing a number of proposals to extend the GST to financial services after South Australian Premier Jay Weatherill raised the issue in September.

According to Parliamentary Budget Office figures, the current rate of GST would raise $18 billion over the next four years, and $4.8 billion in 2016-17 alone.

Based on a GST of 15 per cent, that figure could be closer to $27 billion, but government sources cautioned this was likely to be an "upper limit".

Financial services – whether they relate to mortgage loans, investment advice or trading – were exempted from the original GST partly because of the complexity, with many transactions at the time still recorded and executed in paper format.

Since then, proponents including Mr Weatherill say technology and increased digital automation mean such concerns can be overcome.

A study commissioned by the South Australian government calls for financial services to be taxed the same as other parts of the economy, either through a GST on implicit and explicit fees, or on margins.

This would involve apply GST on services such as the fees charged by banks on mortgage applications and financial advice.

However, there is recognition within the government of concerns raised by some economists that applying the GST to a loan application charge, for instance, could trigger a behavioural shift wherein banks scrap such imposts.

Other options may be to copy the model of how GST is applied to gambling and gaming services.

For instance, gambling GST is levied at 1/11th of a player's losses. Similarly, GST could be charged on 1/11th of a bank's interest paid and interest earned over a period of time.

Mr Tehan said when the GST was introduced in 2000, there was almost unanimous agreement that the complexity of applying it to financial services outweighed the benefits.

"Since then both time and technology have changed Australia", and the GST now covers 47 per cent of the economy compared to 53 per cent at the start.

In New Zealand, the GST has consistently covered about 96 per cent of all goods and services.

The International Monetary Fund last year chided Australia's relatively high reliance on company taxes as being harmful to growth because it discourages investment in productivity, and introduces a bias towards the use of debt.

"Reconsidering the GST exemptions should be a priority agenda item as we embark on further tax reform," Mr Tehan writes in Monday's Financial Review.

"Applying the GST to financial services is where we should start.

"The financial services sector has come a long way since the year 2000, as has the technology used to record and track the financial movements.

"We are now very close to having the ability to apply the GST to these services and it should be the first thing that is reviewed when we consider broadening the GST."

Mr Tehan challenged organisations such as the Business Council to lead the argument for raising the GST to fund lower company tax rates, and allow for wages growth and higher standards of living.