It was always going to happen. Malcolm Turnbull has begun disappointing people as he narrows his options.

No longer everything to everybody, he is choosing who he wants to least put offside and has come down on the side of the voters.

The message at the weekend was pretty clear: if you are going to do a really big tax change, especially one like increasing the GST, you have to be satisfied that it will boost jobs and growth and that, just as importantly, it’s going to be fair.

“I remain to be convinced or be persuaded that a tax mix switch of that kind would actually give us the economic benefit that you want in order to do such a big thing,” the PM told the ABC’s Insiders program on Sunday.

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Coming from Mr Turnbull, that would seem to be the death knell for raising or broadening the Goods and Service Tax.

Those most immediately disappointed: business and the state premiers.

Business because it agrees with Cabinet Secretary Arthur Sinodinos that if you want to fund significant company and income tax cuts you need a great big tax like the GST to be even bigger.

SA Premier Jay Weatherill says we can’t have a country with second-rate services and increasing public debt.

Never mind the churn and the complexity. Its biggest attraction for the top end of town is the fact that the bottom end carries most of the burden.

The states, especially the premiers of New South Wales and South Australia, can rightly feel miffed. Mike Baird and Jay Weatherill have been doing much of the running on a 15 per cent GST to help pay for their schools and hospitals. It’s here that the argument gets very strained.

Mr Weatherill now accuses Mr Turnbull of going to water.

Paul Keating once famously remarked that it was never safe to stand between the premiers and a bucket of money.

Canberra’s biggest bucket of money for them is the GST.

For reasons of political expedience, John Howard back in 1999 gratefully accepted the advice of his then chief of staff, Mr Sinodinos, by deciding the GST was a state tax.

All its proceeds would go to the states and the rate or reach could only be changed if all the states agreed.

When then Treasurer Joe Hockey in 2014 flagged that within a decade Canberra would cut $80 billion of federal funding from hospitals and schools, it was widely seen as laying the groundwork for them to unanimously ask for the GST to be raised.

Treasurer Scott Morrison has conceded that an increase in the GST is unlikely.

But Treasurer Scott Morrison now says he was only ever interested in raising the GST to fund tax cuts and not so the states could spend it on anything.

Adding to the confusion is the hardening of the message from Mr Turnbull and Mr Morrison that they are about reducing taxes, and if the states need more money they should raise their own.

The Prime Minister even kindly suggested the most efficient thing they could do is abolish stamp duty and replace it with a higher, more efficient land tax.

He did admit on ABC TV that the degree of political difficulty would be 11 out of 10.

There is a view in Canberra that the states are happy to let the federal government pay the price for raising taxes, but aren’t willing to do any heavy lifting themselves.

States spending millions on upgrading sporting stadiums rather than on hospitals is one example that has some very senior people privately questioning their priorities.

Mr Weatherill rejects the charge but it is increasingly obvious that he and his fellow state leaders will have to fill their own buckets with more money.

It is clear that the tax cuts Mr Turnbull and Mr Morrison will still take to the election will leave little left in the kitty to make up the shortfall already foreshadowed for schools and hospitals.

Labor leader Bill Shorten is promising to be more generous to health and education, but if he doesn’t match the Liberals’ tax cuts his chances of being in a position to deliver will probably be more remote than they appear at the moment.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics. He is Contributing Editor for Network Ten, appears on Radio National Breakfast and writes a weekly column on national affairs for The New Daily. He tweets at @PaulBongiorno

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