Victoria pitches health plan alternative

Victorian Premier John Brumby says he's "fundamentally" opposed to the commonwealth seizing any of the states' GST revenues - regardless of where the money was to be spent.

Prime Minister Kevin Rudd wants to use 30 per cent of GST receipts to fund his proposed overhaul of the nation's public hospitals.

But Mr Brumby has told ABC TV the GST is an important source of revenue for the states and territories.

They abolished and cut their own taxes when the GST was introduced, he said.

"(So) I would fundamentally object to starting to hand that over because it's the thin edge of the wedge and where will it end?"

Earlier on Thursday, Mr Brumby unveiled an alternative health plan which he believes the states and territories will support ahead of the prime minister's agenda.

It reinforces Victoria's preference for a 50/50 funding split as opposed to Mr Rudd's proposal - which would see the commonwealth become the dominant funder of public hospitals by taking on 60 per cent of funding responsibility.

Mr Brumby argues the commonwealth's plan is a sham because it takes GST funds and "recycles" it as new federal money.

"What our analysis shows absolutely conclusively is that there is no new money in this for Victoria," he said.

Over the next decade "the total real shift in commonwealth funding is from 40 per cent to 41 per cent" under Mr Rudd's plan.

But if the commonwealth increased its contribution to 50 per cent Victoria would be $1.2 billion better off each year, Mr Brumby said.

A genuine 60 per cent contribution could seal the deal.

"If (the commonwealth) were to lift their real funding share to 60 per cent I'd be quite comfortable with that," he said.

"If this was real new money that the federal government was talking about, of course, we'd have a conversation."

If the states don't sign up to federal Labor's health plan at a Council of Australian Governments (COAG) meeting on April 19 Mr Rudd says he will hold a referendum on the issue.

Mr Brumby said on Thursday night said he would oppose any such move.

"I would, yes," he said.

The commonwealth argues Victoria is already $5.1 billion better off under the current five-year healthcare agreement negotiated by federal Labor.

It's proposed reforms would see the state receive an additional $3.8 billion in the five years from 2014.