GST must be changed: State of the Nation 2014

Changes to the GST are needed to provide states with additional income, Former Victorian Premier and COAG Reform Council Chairman, the Hon. John Brumby has told CEDA's State of the Nation conference in Canberra.

"You do need to give the states an additional source of revenue which is efficient and which is I think most equitable in terms of the nation's competing interests," he said.

"In my opinion that's some change to the GST."

Mr Brumby also said responsibility for some services should shift back to the states.

"My consistent long term view is that the Commonwealth has been taking more and more responsibility and that it is time for some of that to shift back to the states," he said. 

PwC Economics and Policy Partner and Canberra Office Managing Partner, Jeremy Thorpe also addressed the conference saying there has been a change towards cooperative federalism and activity based funding.

Mr Thorpe also said developing infrastructure, especially public transport enables productivity growth in cities and states.

"You do see productivity change with infrastructure coming in, particularly with public transport," he said.

"That's why I'm a bit worried about the current government's focus on roads."

Shadow Assistant Treasurer and Shadow Minister for Competition, Andrew Leigh said it is important to implement tax reform.

"Good tax reform involves broadening the base and lowering the rate," he said.

According to Mr Leigh, Labor will focus on multinational profit shifting.

"If we don't tackle multinational profit shifting, we're creating distortions in the market," he said.

Mr Leigh said the software revolution has had implications for the tax base and as a result governments must ensure multinationals do not avoid paying tax.

"It also places the onus on Australian governments not to keep open loopholes that allow profit shifting," he said.