State and Federal Treasurers are meeting today in Canberra to discuss tax reform, where Victoria and Queensland will state their position that a 51 percent top tax tier is fairer than a 5 percent increase in the GST. The states and Commonwealth are meeting to discuss how best to raise the extra $35 billion a year that will be needed by 2030 to fund public health.

New South Wales and South Australia want to see the GST rate increase from 10 per cent to 15 per cent, with the extra revenue spent on public health.

The Victorian government believes that the federal government's proposed GST increase accompanied by other tax cuts would not leave enough revenue to meet growing public health costs. Instead, Victoria suggests a 2 percent point increase in the Medicare levy to cover growing public health costs. This would also create an even more uncompetitive top tax rate of 51 per cent.

The Federal government has already shot down Victoria's proposal which was first raised last month at a meeting of the Prime Minister and premiers, but The Australian Financial Review reports that Victoria will persist with it on Friday on the grounds it would be more equitable than a GST increase because lower-income earners would not be affected.