PM puts deadline on health funding

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Premier Annastacia Palaszczuk, New South Wales Premier Mike Baird, PM Malcolm Turnbull, Victorian Premier Daniel Andrews and Western Australia Premier Colin Barnett.

MALCOLM Turnbull has set a March deadline to work out a deal with Queensland and other states over future hospital funding and how to overhaul taxes to pay for it.

In a sign of a possible breakthrough after combative talks between state and federal Treasurers, Mr Turnbull said he “recognised” the concerns of states about the rising cost of healthcare and agreed there needed to be a solution.

“The health system goes obviously well beyond any one jurisdiction,” Mr Turnbull said. “All of us, in different ways, have a shared responsibility for the health of all Australians.”

CHANGES: Palaszczuk urges PM not to cut income tax

The deadline makes it likely Mr Turnbull will lay out his own plans for tax reform – including his decision over whether to take a risk on hiking the GST – by March.

Under the plan, states and territories will reach agreement with the Federal Government in time to make their own decisions ahead of their budgets next year.

There could also be an interim agreement to protect health funding before planned federal cuts start to hit next financial year if there is not a long-term deal in place by March. Mr Turnbull would not commit to $80 billion in future health and education funding cuts over 10 years announced in Tony Abbott’s first Budget in 2014, saying he had “heard” the concerns raised by states.

“Rather than going into history, let’s look at the challenge going forward and how we can work together to address it,” Mr Turnbull said.

The PM’s comments come after Treasurer Scott Morrison this week ruled out using any tax increases to help states increase spending.

All options for tax changes remain on the table, including a GST rise, handing control of income taxes to states and overhauling state taxes.

Queensland Premier Annastacia Palaszczuk is still opposed to increasing GST and is pushing to increase the Medicare levy from 2 per cent to 4 per cent to cover health costs.

Laying down conditions for tax reform, Mr Turnbull said any changes would need to be “fair” and “growth enhancing”, adding he wanted to keep “taxes as low as possible”.

Marking a clear break from the tense relationship between the federal and state governments under Mr Abbott, Ms Palaszczuk and other Labor premiers welcomed the more co-operative approach.

After criticising Mr Turnbull before the meeting, Ms Palaszczuk praised him for listening to concerns.

“I think there’s been a broad-ranging acceptance that health is our national … No. 1 priority,” she said.