Malcolm Turnbull and Scott Morrison have moved to quell backbench unrest over a possible hike in the GST.
The prime minister and treasurer are considering a GST rise as part of a broader package of tax cuts the coalition will take to the election.
But they have yet to say whether the GST will rise from 10 per cent to 15 per cent.
Mr Morrison told parliament the government still had "no preferred proposal" on tax reform.
"The government has not determined its position on this matter, I have not determined my position ... the prime minister, the members of the cabinet are yet to consider these matters," the treasurer said.
Mr Turnbull said the "only realistic option for significant income tax cuts" was to change the tax mix, which is why some people have advocated raising the GST.
Responding to concerns, he said he had three aims for the tax changes.
"Firstly, they have to drive growth and jobs," he told parliament on Thursday.
"Secondly, they have to be fair. And thirdly, the complexity associated with them has to be justified in terms of a productivity output."
The prime minister acknowledged concerns that compensating for a rise in the GST would need to go further than just cutting income tax.
People on welfare payments would need to be "fully compensated" and ways would need to be found to buffer part-pensioners and self-funded retirees.
Veteran Liberal MP Russell Broadbent, who lost his seat in 1998 when John Howard campaigned for the GST but later returned to parliament, said the idea of an increase in a tax that everyone pays "doesn't go down very well".
"I don't think it raises that much money anyway and the compensation you would have to pay sort of ameliorates all the benefits you would gain," Mr Broadbent told Sky News on Thursday.
However he said he would support the final plan put to the coalition party room.
Liberal senator Cory Bernardi, who is opposed to raising the GST, said there might be a short-term benefit, but in the long term everyone would be paying more tax.
"I think it would be folly for the government to do it, because I think electorally it's unpopular but, two, it does increase naturally the size of government," he said.
Shadow treasurer Chris Bowen questioned whether a period of global economic uncertainty, sluggish wages growth and slowing growth in China was the best time to jack up the GST.
"There is one reason Liberal MPs don't want Scott Morrison to increase the GST - it is because they're scared about their seats," Mr Bowen said.
"The reason the Labor Party doesn't want Scott Morrison to increase the GST is because we are concerned about the impact on low and middle income Australians - a very big difference."
