Australia's government leaders hold meeting to shape nation's future

Australia Prime Minister Tony Abbott will meet with the nation's eight state territory leaders at a retreat in Sydney over Wednesday and Thursday to gain common ground on the future shape of Australia's federation.

High on the agenda at the meeting in Sydney will be reforms to Australia's taxation system, with New South Wales Premier Mike Baird having already proposed an increase to the nation's Goods and Services Tax (GST) or sales tax to be used for future healthcare funding needs.

Baird, in his argument, calculated the nation's states do not have enough money to cover their obligations to provide the services for Australia's healthcare system, regardless of whether the federal government had cut billions from its future contributions or not.

Australian Treasurer Joe Hockey cut 80 billion Australian dollars in funding to the state governments in his first budget.

Not all of the leaders agree with Baird's proposal, voicing their objections loudly in Australia's local media.

Both Queensland's and Victoria's respective leaders are citing their continued commitment to pre-election promises to oppose any GST increase on the basis that hiking a consumption tax affects Australia's poor -- who spend a greater proportion of their income relative to Australia's wealthy, therefore paying more tax.

Alternative arrangements to help plug the cut in funding include increasing the federal health levy taken from Australia's income tax.

Australia's education union also wants the leaders to focus on reversing a planned 30 billion Australian dollar cut in federal funding to the education sector.

"The future of our schools and students is too important to be neglected," union boss Correna Haythorpe told local media.