Australia's Prime Minister Kevin Rudd Tuesday won the support of all but one of the country's states for a planned overhaul of the health system.
Rudd had previously threatened to hold a referendum unless the states agreed to hand over a portion of sales tax revenues and allow the central government to be the main funder of hospitals.
But after two days of talks in Canberra, Rudd said the leaders of seven of the country's eight states and territories had reached an agreement and a plebiscite was no longer needed.
"For the first time, the Australian government will become the dominant funder of the entire (health) system," the prime minister told a press conference in Canberra.
The deal has yet to win the support of resource-rich Western Australia, which contributes millions of dollars to the national coffers through mining revenues, but Rudd said he hoped to resolve the matter by July 1.
Under the deal, the national government will fund 60 percent of building, equipment, teaching and services in 762 public hospitals. The government will also provide 1,300 new hospital beds and 6,000 more doctors.
Western Australian Premier Colin Barnett said he supported much of the package but would not relinquish his state's control of the Goods and Services Tax (GST) revenue.
"The Commonwealth essentially taking one-third of the total GST pool is not acceptable to me and it is not acceptable to Western Australia," he said.
Under the current setup, state governments manage their own hospital systems.