Prime Minister Tony Abbott has hosed down expectations his leaders retreat will settle on changes to the GST.
"We are at the beginning of the process," Mr Abbott said on Tuesday.
Mr Abbott and the premiers and chief ministers will take part in a retreat in Sydney on Wednesday that seeks to thrash out a future framework for the federation.
The GST is high on the agenda after NSW Premier Mike Baird proposed an increase in the rate to 15 per cent from 10 per cent as a way of funding a projected shortfall in health funding.
Mr Abbott has declined to say whether he agrees with his Liberal colleague or if the Commonwealth would finance any compensation for households.
Tax Institute president Stephen Healey believes the government should, at a minimum, undertake a comprehensive review of the exemptions and special rules in GST law to ensure they are still "necessary and appropriate".
Opposition Leader Bill Shorten, who will not be at the retreat, continues to oppose a rise in the GST, arguing it's a lazy approach to the problems created by the Abbott government when it cut health and education funding to the states.
But two other Labor leaders, South Australian Premier Jay Weatherill and ACT Chief Minister Andrew Barr, have welcomed the consideration of Mr Baird's proposal while stopping short of offering wholehearted support.
"We can't enter these discussions by just ruling things out," Mr Weatherill said.
Mr Barr said the federal government had failed to contribute constructively to the taxation reform debate.
"Just because it's difficult doesn't mean that we shouldn't try," he said.
Like Victorian Premier Daniel Andrews, Mr Barr is keen to pursue an increase in the Medicare levy as a way of securing more money for health.
Mr Andrews believes it is a fairer alternative to raising the GST.
While he accepts the average family might be angry about paying more in tax, he says the anger should be directed at Mr Abbott after he hacked into hospital funding "like no other prime minister".
Queensland Treasurer Curtis Pitt also says there will need to be a "compelling argument" to change his view of opposing a rise in GST.
West Australian Premier Colin Barnett has backed a GST overhaul, including increasing the rate to 12.5 per cent and extending it to online goods and services and fresh food.
But Tasmanian Premier Will Hodgman is confident the meeting will not be swamped by the GST debate and intends to push his own agenda of guaranteed state funding.
Australian Industry Group boss Innes Willox said the meeting should be more than an effort to extract more revenue.
He said it should also get the states and territories to ditch some of the "most harmful" taxes levied in the system.
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