Australian Prime Minister Malcolm Turnbull ruled out any changes to the Goods and Services Tax (GST) on Tuesday, ending weeks of speculation he would take the radical tax reform plan to the 2016 federal election.
Turnbull told the media on Tuesday that raising the GST from the current 10 percent up to 15 percent was not "justified" economically, but said other tax reform options were still "on the table".
He said the growth dividend as a result of raising the GST would be "somewhere between nil and very small" after appropriate compensation for lower income families was taken into account.
"We looked very carefully at several proposals to increase the GST," Turnbull said on Tuesday, "(But) the government will not be taking a proposal to increase the GST to the (upcoming 2016) election."
"After you take into account all of the compensation that you would need to ensure the change was equitable, it simply is not justified in economic terms."
The GST affects transactions on purchased goods and services except for those involving fresh food, medical services, education courses, childcare and exports.
Previously, the government said a tax hike would raise up to 25 billion U.S. dollars annually for the government, but the opposition slammed the decision as one that would only negatively affect lower income households.
The prime minister did not mention any potential replacements for raising tax revenue now the GST rise was officially off the table, but said the government was committed to tax reform.
The federal election is set to take place in August or September, with an official date to be announced by the government in coming weeks.