Prime Minister Tony Abbott's day-long retreat with state and territory leaders has been hailed as "incredibly constructive" but any progress on critical state funding and GST issues remains unclear.
NSW Premier Mike Baird left the leaders' retreat at Sydney's Victoria Barracks on Wednesday - where informal discussion of the GST and state funding were the key issues - saying the mood was "probably the most constructive I have ever seen".
"It's been an incredibly constructive day, a vast array of issues considered," Mr Baird said.
The discussion around hotly debated changes to the GST came a day before Thursday's Council of Australian Governments (COAG) meeting, when leaders will return to the barracks for formal discussions.
Mr Baird - the only leader to speak to media after the retreat - would not say whether any of his counterparts had warmed to his proposal of an increase in the rate of the GST to 15 per cent as a way of funding ballooning state health costs.
"I'm not going to discuss where we got to on any of the measures," he said.
"Not everyone agrees on every position clearly but there is a determination to do what is right to make the most of this opportunity."
Other state leaders have opposed a change to the consumption tax or offered muted support, while federal opposition leader Bill Shorten also opposes an increase.
On Thursday a new terrorism alert system and tackling family violence will be top of the agenda for the formal COAG meeting - the 40th conference of its kind.
The leaders will be briefed on a revised national terrorism threat advisory system.
The current system has four public alert levels: low, medium, high and extreme.
The public alert level has been at "high" since September 2014 on advice from spy agency ASIO following dozens of Australians supporting Islamic State's extremist activities.
The new system is understood to have five levels - not expected, possible, probable, expected and certain - considered a clearer way of indicating the threat of an attack.
COAG will also be briefed on the current threat environment by security agencies and the role of the new commonwealth counter-terrorism co-ordinator Greg Moriarty.
The leaders will discuss ways to address domestic violence and the national ice drug strategy.
The national ice task force will present its interim report after a series of community forums and advice from experts.
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