Income tax plan 'good reform': WA premier

The federal government plan to allow the states to raise income tax has been backed by West Australia Premier Colin Barnett, who wants greater fiscal autonomy.

State premiers and territory chief ministers are expected to be briefed on the plan when they meet at the Council of Australian Governments meeting in Canberra this week, as the federal government moves to fix a looming hospital funding black hole.

Under the plan, the federal government will decrease its income tax collection and allow states to collect the remainder to fund services like health and education.

To offset its revenue loss, the Commonwealth will reduce grants to the states.

While states will initially be limited by how much they can raise income tax, they will be free to lower or raise it in the future.

Mr Barnett said he had spoken about it at length with Prime Minister Malcolm Turnbull and it was a "simple reform" that made sense.

"I think he's thinking in terms of two or three per cent of the income tax take," Mr Barnett told reporters on Wednesday.

"It's a good reform, not only for the states, I think it's a good reform for Australia.

"I think that the prime minister and I are basically in agreement."

He said WA's "miserable" share of GST remained its greatest tax issue, but he backed the proposal as it gave states more autonomy.

WA opposition leader Mark McGowan said: "the idea of giving Colin Barnett more capacity to raise taxes is a bad one".