"If you look at all of the arguments and all of the facts, it is inevitable that we need to increase in the GST - the only debate is really about the base broadening."

Mr Brumby's remarks capped two days of debate at the AFR Tax Reform Summit in Sydney, where there was broad recognition that 25 per cent should be the "new 30 per cent" for company tax; that the "swiss cheese nature" of concessions across the income tax system should be closed; and that superannuation and capital gains concessions should be cut.

Phil Edmands, a Rio Tinto managing director and Business Council of Australia director, said the savings system should not be used as a vehicle for wealth creation.

"Superannuation is there to allow people to provide for their retirement," he said."I think business accepts that the concessions need to be looked at."

South Australia Premier Jay Weatherill added weight to Mr Brumby's GST call, but said debate on change shouldn't be limited to a discussion about the 10 per cent rate, but also what the tax applies to.

GST ON FINANCIAL SERVICES MOOTED

Mr Weatherill challenged federal and state leaders to show the "wit" and find a mechanism to apply the GST to financial services, which he said would impose a greater cost on the well-off rather than the "regressive" approach of charging the tax on food, and healthcare.

Mr Brumby, who as treasurer and premier of Victoria delivered budget surpluses and pushed for a national reform agenda to boost states' revenue to fund health, education and skills, said he wasn't a supporter of expanding the GST completely and warned against using such revenue to pay for company tax cuts.

"It's very difficult to broaden the base out on fresh food to 15 per cent and think you'll get that through the Senate, especially if at the same time you're using that revenue to cut company tax," Mr Brumby said. "That's a hard story for a politician to sell."

Mr Brumby presented his ideal tax changes, which would raise an extra $40 billion by increasing the GST to 15 per cent and "some" base broadening. Some $5 billion could be used for tax compensation; $15 billion would go to the states, $5 billion would be used for a company tax cut to 25 per cent by 2020; and the remaining $15 billion could be used by the federal government for income tax cuts.

"The reality is now that in the 15 years that the GST has been in place… we've seen a shift back to reliance on taxes on income, a significant shift," he said. "So we need to rebalance the system, reorient it towards consumption and take the weight off bracket creep on ordinary earners."

The second goal of tax reform is to help states cope with their struggling budgets and growing demands for services.

"It's got to be a twin-edged effort on the revenue side and the expenditure side to bring that deficit down much more quickly than it otherwise would [come down] so this burden doesn't just crush the next generation," he said.

Low interest rates negate need to cut rates

John Daley, the chief executive officer of the Grattan Institute, proposed a similar package but said there wasn't a "compelling argument" for reducing corporate tax rates because global interest rates are so low.

While tax theory suggests lower corporate taxes would lead to more investment, with global interest rates at such a low level that notion was more theoretical that practical, Dr Daley said.

Former NSW premier Nick Greiner urged reformers to keep the options on tax change as broad as possible and said it was "outrageous" new Treasurer Scott Morrison to rule certain changes out. "Both sides of politics ought to grow up," he said.

"Malcolm [Turnbull] has been mature and grown up and said let's put everything on the table and that's the only way to go to get serious tax reform." Not least, Mr Greiner said, because of the "massive issue" of funding the national disability insurance scheme.

"I think the NDIS is a really good idea with huge support across the community, [but] is fundamentally under funded going out," he said. "I think we should be honest about that." ACT chief minister Andrew Barr said that tax reform requires political capital that hasn't been seen around the country of late. The ACT is replacing property stamp duty by increasing property taxes and cutting payroll taxes to spur business investment. "We are prepared to expend some political capital in order to get a better tax system," he said.

"For the ACT as a small economy we need a comparative advantage. That is how we'll get capital flows into our jurisdiction." Businessman Mark Carnegie called for an independent tax authority similar to the Reserve Bank of Australia that would levy taxes. "We have an independent tax authority that basically says politicians have the responsibility for working out how much they want to tax," he said. "How you want to tax is done by a group like the RBA board."