South Australia has broken ranks with other Labor states and come out in favour of a 15 per cent goods and services tax, with conditions. 
Premier Jay Weatherill told a business lunch in Adelaide he would be taking a plan to the next leaders' meeting on   December 11 for an increase in the GST from 10 to 15 per cent on the condition that the extra revenue was kept by the Commonwealth rather than the states. In return, the federal government would allocate the states a fixed proportion of its income tax revenue.
Most other Commonwealth grants to the states would be converted to a share of the income tax base, he said.
The Commonwealth collected income tax on behalf of the states up until the Second World War, when it stopped handing it over on a "temporary" basis but never resumed.
Mr Weatherill said a reasonable share of Commonwealth income tax collections would be 17.5 per cent.
All decisions about compensation for the GST increase and income tax rates and exemptions would be made by the Commonwealth, he said.
"This is a superior solution to the states' long-term health-care needs than the proposed increase in the GST to 15 per cent," he said.
Victorian Treasurer Tim Pallas responded by saying he remained opposed to an increase in the GST.
"Any discussion about tax reform should focus on fairness, and should start by ensuring the Commonwealth pays its fair share of health and education funding," Mr Pallas said.