The meeting between Prime Minister Kevin Rudd and the premiers on a new health plan has broken up for the day and the talks remain deadlocked.

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The Council of Australian Governments (COAG) meeting will resume tomorrow.

West Australian Premier Colin Barnett says they still haven’t gotten to the issue of the GST or pool funding.

Mr Rudd is proposing the commonwealth would claw back about 30 per cent of states’ GST revenue and, in return, the federal government would take control of 60 per cent of hospital funding.

The GST is a no-go zone for Victoria, Western Australia and NSW.

But states are willing to dedicate 30 per cent of GST funds to health that would flow into a common pool, removing the necessity for the GST clawback.

Brumby: Still areas of disagreements

Victorian Premier John Brumby told reporters there were still areas of disagreement.

Mr Brumby said he welcomed the additional funds put on the table by Mr Rudd on Monday.

“That’s something I’ve been asking for over the last few weeks,” he said.

“That’s a very positive step forward.”

The Victorian premier said funding arrangements would be discussed on Tuesday.

“I don’t know if we’ll wrap it up tomorrow (but) hopefully we will.

“Hopefully we’ll get an outcome that provides more money for patients, our hospital system and aged care starting immediately.”

Mr Brumby was also hoping for more funds “in the longer term”.

But he insisted it wasn’t just about extra cash.

Victoria remains opposed to the commonwealth clawing back 30 per cent of the GST to fund the planned national health and hospitals network.

The leaders are having dinner with Mr Rudd at The Lodge on Monday night.

They’ll be joined by federal Treasurer Wayne Swan and his state and territory counterparts.

Barnett: GST still sticking point

Mr Barnett told reporters the GST remained a sticking point.

“We believe that we can reach agreement on health. The sticking point will be the GST issue,” he said.

“Certainly a lot of new money was put on the table.”

On Monday, Prime Minister Kevin Rudd was offering premiers an extra $1.2 billion to win them round to his health plan but it remained contingent on handing over 30 per cent of their GST.

The additional funds, which would flow from July 1, 2010, would go towards elective surgery, emergency departments and new beds.

Mr Barnett said discussions had covered a lot of ground.

“We did get through a lot of the detail of what would make up the package,” he said.

“The two big issues to me remain, that is the nature of the national pool and secondly the GST issue.”

Keneally: Positive signs

NSW Premier Kristina Keneally said the states and territories would consider the prime minister’s offer overnight.

“We are seeing signs towards agreement,” she said.

The premiers are expected to meet on Tuesday morning before talks resume.

NSW, Victoria and WA are opposed to Mr Rudd’s plan to clawback the GST.

Ms Keneally maintained she wouldn’t sign up to a plan that disadvantages our taxpayers.

“We are here to build a sustainable health system into the future, we’re here to improve access for families in NSW to medical care,” she said.

Those have always been our two bottom line issues.

“If the deal that can be struck can deliver those things we’ll be on board, if we can’t we can’t sign up.”

Rann: More number crunching needed

South Australian Premier Mike Rann said officials would be “number crunching” overnight.

“Hopefully we’ll be able to crack a deal tomorrow,” he told reporters.

“But we’ve still got a long way to go and the key issues of the GST and governance arrangements have to be dealt with.”

Mr Rann admitted the GST dispute could undo Monday’s good work.

“In terms of the progress that has been made it is all contingent on getting a breakthrough over the GST on the fundamentals of the prime minister’s reform package,” he said.