State and territory leaders, with the exception of Western Australia, have reached an agreement with Prime Minister Kevin Rudd over his health care reforms.
Prime Minister Kevin Rudd says it's a 'historic agreement' that will be good for working families.
The Prime Minister says the negotiation were "long and tough", but that the state and territory leaders "worked well" with their Commonwealth counterparts.
WA Premier Colin Barnett says his state will not be signing the agreement.
He says the deal "is not ideal" for WA due to a disagreement over the allocation of GST.
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Mr Barnett says the outcomes of the deal may still be reached, with WA paying the equivolent amount of funding to the Commonwealth government, while still keeping the third of GST that the other states and territories will hand over.
PM says he's confident they can work out a deal with "our friends in the West", though it may involve "a bit of an arm wrestle".
Negotiations with Western Australia will continue. Mr Rudd says he's certain WA and the federal government will reach an agreement before the July 1st deadline. He says there is no need for a referendum on health despite WA's rejection of the reforms.
The Prime Minister won over Kristina Keneally earlier on Tuesday following one-on-one discussions with the NSW premier.
Speaking after the deal was struck, Ms Keneally says the thing that sealed the deal for state leaders was the extra money set aside for additional hospital beds.
The PM put an extra $800 million on the table this morning.
As part of the reforms, the Commonwealth says it will provide new resources for mental health, 6000 new doctors, better implementation of elective surgery timelines and more of a focus on aged care.
"This is a very big reform," Mr Rudd says.
But he says Commonwealth and state leaders will not rest on their laurels now that a deal has been struck.
"There's still more work to be done," Mr Rudd.
Later discussions with John Brumby convinced the Victoria premier to sign up to a plan under which the commonwealth will retain about a third of the states' and territories' GST revenues.
The federal government will use that money to help it finance its role as the dominant funder of the nation's public hospitals.
Sources say Mr Rudd has had a victory on his GST clawback, but the funds will be directed into a pool, which will distribute funding to local hospital networks.
Tasmanian Premier David Bartlett put his signature to a new intergovernmental health agreement before rushing off to catch a plane home.
The commonwealth had offered more money for mental health and non-acute hospital beds during Tuesday's negotiations, he says.
Western Australia has not agreed to the deal, Premier Colin Barnett told reporters.
He says he is disappointed the Labor premiers and chief ministers had agreed to allow the Commonwealth to retain about a third of their GST revenues.
