Australian Prime Minister Tony Abbott and NSW Premier Mike Baird talk GST in southwest Sydney today. Picture: AAP Image/David Moir Source: AP

And with his salute, the Prime Minister immediately launched a raft of conspiracy theories.

Mr Abbott did not endorse the “very sensible” proposal but indicated the time might be right for a reshaping of the consumption tax: “I certainly think people have got used to the GST … I’m not saying people love it.”

And Mr Abbott reconfirmed the government’s broad objective was to cut tax: “I guess the only good tax is a tax that’s about to be abolished.”

He told reporters while standing alongside Mr Baird: “I think Australians should be hopeful that this generation of leaders is capable of addressing the big subjects, is capable of doing what’s necessary to make our country work better with better schools, better hospitals, more efficient and more effective government for everyone.”

Mr Baird’s dramatic contribution to the tax debate gave Mr Abbott a discussion starting point when state leaders meet on Wednesday and Thursday for talks on funding and federal-state relations broadly.

“I welcome Premier Mike Baird’s willingness to discuss revenue issues, because obviously, if there is a problem with revenue, it can’t just be the Commonwealth’s responsibility to solve,” Mr Abbott said.

And he won support for a GST debate from South Australian Labor Premier Jay Weatherill.

“The massive cut to health funding has to be filled in some way. We have to have the discussion (about increasing the GST),” Mr Weatherill said today.

However, the federal Opposition accused the Prime Minister and the NSW Premier of conniving on a deal.

“This was the Liberal Party plan from the very beginning. This is the Liberal Party’s grand plan to make the Australian people pay for Tony Abbott’s broken election promises,” shadow treasurer Chris Bowen said.

Mr Baird had previously attacked the federal government for not maintaining health spending promises to the states worth $80 billion under Labor governments.

But today he said a 50 per cent rise in the GST would help premiers overcome shrinking funding for hospitals, a ballooning area of state budgets.

Chris Bowen said: “Last year we saw a tough-talking Mike Baird who decried the $80 billion cut (as) a kick in the guts to the people of NSW.

“Today, Mike Baird has confirmed that he’s happy to do Tony Abbott’s bidding on the GST.

“Why are Tony Abbott and Mike Baird so quick to talk about increasing the GST but refuse to talk about making multinational companies pay their fair share of tax?

“Mike Baird’s plan for a 15 per cent GST is total capitulation — which will cost all Australians.”

Victorian Labor Premier Daniel Andrews has rejected moves to increase the GST or broaden its reach to goods and services currently exempt.