The federal government insists it won’t cave in to Labor’s scare campaign on a potential GST rise.

Education Minister Simon Birmingham says the long term interests of the nation are at stake in the tax reform debate.

“We won’t be spooked by their scare campaign,” Senator Birmingham told Sky News.

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Liberal MP Dan Tehan wants his government to consider applying the GST to financial services.

Removing the existing exemption will generate at least $18 billion over the next four years and help offset a reduction in the company tax rate, he says.

“It should be the first thing that is reviewed when we consider broadening the GST,” Mr Tehan writes in the Financial Review on Monday.

Finance Minister Mathias Cormann said the government would not be locking itself into specifics at the moment.

But it is pursuing tax reform that will help strengthen productivity and economic growth, as well as encouraging people to work, save and invest more.

“At the moment we are in good faith engaging with the states and territories … in an open-minded conversation about how our tax mix can best be improved,” Senator Cormann told ABC TV.