Grown up discussion on GST needed: Brumby

Australia needs to have a grown-up conversation about the GST if the states are expected to fulfil their responsibilities.

But chairman of the soon-to-be defunct Council of Australian Governments (COAG) Reform Council, John Brumby, believes an increase in the impost is inevitable.

He backs Prime Minister Tony Abbott's focus of ensuring the states are "sovereign in their own sphere".

But Mr Brumby, the former Victorian Labor premier, says a discussion is also needed about the revenue they need to fulfil their roles and responsibilities.

He told a Committee for Economic Development of Australia conference in Canberra that since the global financial crisis, state and federal governments have faced a major revenue problem.

"Our existing taxes and charges are simply not adequate to provide the services in transport, infrastructure, health and education the community expects us to provide," he said on Tuesday.

"In my view the real debate about the GST is not about whether it needs to increase. I think that's inevitable," he said in his prepared speech.

The real debate is about the nature of the increase - its base versus rate, or both - the compensation provided to low-income earners and pensioners and the distribution of the proceeds.

The COAG Reform Council finishes up on June 30.