PM indicates support for GST changes after leaders meeting

PRIME Minister Tony Abbott has given the strongest signal yet he wants changes to the GST, saying on Thursday he prefers that option to increasing the federally administered Medicare levy.

Mr Abbott's comment followed two days of talks with his state and territory counterparts about taxes, terrorism, methylamphetamine and domestic violence.

The PM has previously ruled out considering changes to the GST in his government's own tax white paper.

He said increasing the Medicare levy, as backed by the Labor premiers from Victoria and Queensland, did not amount to reform.

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Instead, he preferred a "joint exercise between the Commonwealth and the states", but did not detail whether that included a rise in the rate of the GST or expanding the goods and services it applied to.

Standing in the way could be Queensland Premier Annastacia Palaszczuk and Victorian Premier Daniel Andrews, who both recently won elections on platforms that included opposing changes to the GST.

While the meeting resulted in no tangible tax reform plans, all premiers and chief ministers said it marked progress towards ensuring all governments could cover the rising costs of services, particularly healthcare.

South Australian Labor Premier Jay Weatherill said it was the most constructive political meeting he had attended in 13 years.

One decision to come out of the summit was its endorsement of a new terror alert system.

It will be in place by the end of the year and replace the existing system, which rates threats from low to medium, high and then extreme. It will be replaced by: not expected, possible, probable, expected and certain.

Australia's threat level is "high" at the moment.