"There's no way of increasing the revenue for it without hurting people who can least afford it."

Prime Minister Tony Abbott will hold a leaders' summit in Sydney next week with state premiers and chief ministers and plans to raise there the question of Commonwealth/state funding arrangements, including the GST.

He will tell premiers they need to eventually take control of public hospitals and schools and they will need a state revenue base to match that.

Mr Hockey has put fresh pressure on the states ahead of the summit, saying some of them ought to rethink their opposition to increasing the GST because they need to start taking responsibility for their budgets, and need to find a way to afford their "ever increasing expenditure" on public hospitals and schools.

The Grattan Institute think tank warned this week that state budgets face an annual $16 billion revenue shortfall by 2024-25 as a consequence of the Abbott government's decision to substantially reduce promised transfers to the states for hospitals and schools.