MORE hospitals could be closed and state taxes increased unless South Australia secures additional revenue to fund the health system, Premier Jay Weatherill has warned.

Mr Weatherill made the claim as federal Treasurer Scott Morrison on Tuesday said the federal Government would never have used revenue from a higher GST to boost funding for the states.

The Premier said it was “absolutely” still an option to consider closing more hospitals if a health funding solution could not be found.

He has conceded that an increase to the GST rate is looking increasingly unlikely but he has refused to resort to increasing state taxes.

The State Government is closing the Repatriation General Hospital at Daw Park in 2017, partly in response to up to $80 billion in cuts to promised health funding delivered in the Coalition Government’s first budget.

media_camera The Daw Park Repatriation Hospital. Picture: File

“We said this right at the start, if we don’t get a solution to funding the public hospital system. Absolutely that (closing hospitals) is certainly a prospect,” Mr Weatherill said.

“If you think some of the changes we’re proposing are challenging and controversial, imagine if we have to live with these $80 billion in cuts.”

He conceded that need to raise state tax increases “could well be forced on us” but that it was “not our preference” to increase taxes such as payroll and land tax, as suggested by the Prime Minister.

Mr Weatherill had been pushing for an increase to the GST, to 15 per cent, in exchange for a share of income tax revenue which states could spend on health.

However, Prime Minister Malcolm Turnbull has all but ruled out a GST rise unless it can be shown to drive economic growth.

Mr Morrison said the Federal Government had only considered lifting the GST so that it could fund substantial income tax cuts.

“The only reason we were looking at issues, and continue to investigate those, is because it gives the only opportunity there really is for very big income tax cuts,’’ Mr Morrison told Sydney radio 2GB.

“ Now if for the reason that other issues prevent that — ie the compensation bill is too big, if the states only want an increase in the GST so they can spend more money — then they are big problems and those problems do work against the objective.”

Mr Weatherill said there were measures other than his tax reform plan that could be used to fill the health and education funding gaps faced by the states.

These could include broadening the base of the GST to cover financial services, increasing the Medicare levy as proposed by the Queensland and Victorian premiers or reducing superannuation benefits for high-income earners, Mr Weatherill said.

“It’s no answer to simply say we need to run these hospitals more efficiently,” he said.

“I want to put the responsibility back where it belongs — with the people that did the cutting (of the health budget).

“There might have been a change in Prime Minister but there has not been a change in attitude.

“There is a political price to pay for this (budget cuts) and we’re going to insist that the Prime Minister pays it.”