Turnbull explains GST backflip

Malcolm Turnbull has again hosed down calls for changes to the GST, arguing it's not the easy revenue spinner some believe it to be.

The prime minister has also explained why his government rejected considering a hike to the 10 per cent rate last year.

"The idea that there is a huge, easy pot of gold to grab on simply did not stack up," Mr Turnbull told a business summit in Sydney on Thursday.

That's because there would not be the expected pot after the nation's poorest were compensated.

"The problem with raising the GST is that because so many Australians are not in the tax net, by the time you have kept the bottom 40 per cent of households by income compensated so they're not worse off, you have very relatively little money left."

"That is one clear objection. That's why we rejected it as a proposal last year."

Mr Turnbull said he understood many wanted an increase to the GST to be used to pay for company tax cuts.

But that wasn't the right plan.

He defended his government against criticism that it failed to embark on substantial tax reform, pointing to superannuation and middle-income tax bracket changes.

He said Australian tax rates - both for workers and companies - were too high.

"We are already highly taxed."