Prime Minister Kevin Rudd will make a last ditch effort to convince state and territory premiers that his health reforms are the way to go at today's Council of Australian Governments meeting in Canberra.
Today's meeting follows last night's gathering where the premiers were holding out for new concessions from the Rudd government.
In a last attempt to convince the states and territories, the federal government locked in its commitment to meet future additional health costs - estimated at $15.6 billion - even if the final figure comes in lower.
"This will be signed in black and white in a new intergovernmental agreement between the Australian government and the states but first we need the states and territories to sign up to these historic reforms," Prime Minister Kevin Rudd said via a message on YouTube.
In the week leading up to the CoAG meeting, Mr Rudd has offered several sweeteners to the states and territories, including a $739 million to the aged care sector.
Mr Rudd wants the states to hand over 30 per cent of their GST revenue in return for the federal government to take 60 per cent control of hospital funding.
Western Australia, New South Wales and Victoria oppose the GST clawback, preferring a joint state-federal funding pool for health instead.
WA Premier Colin Barnett said the prime minister was unlikely to get an agreement on making the states hand back 30 per cent of their GST revenues.
"Western Australia will simply not give up GST," he told reporters before the CoAG meeting.
"I think it would be a tragedy if the opportunity to make long-term improvements to our health system were squandered by the simple objective of the commonwealth to try and access and take over GST revenues."
Western Australia was prepared to pay an amount, equal to one-third of GST revenue, into a federal-state public hospitals funding pool.
"But we will retain state control and it will be state government expenditure into that pool," he said.
While the GST was the "show stopper" for WA, Mr Barnett said the Australian people expected compromise.
"I can agree to, probably, what is proposed on health," he said.
"I'm not happy about all parts of it but I'm willing to give ground and willing to reach agreement."
Mr Rudd has previously said that if an agreed outcome could not be reached at the meeting, then the health reforms would go to a referendum.
