The federal government offered states and territories an extra $30 billion in public hospital funding over the next five years at the first Council of Australian Governments (COAG) meeting of the year on Friday.

The deal, which NSW and Western Australia signed, would see spending growth capped at an annual 6.5 per cent for the five years from 2020.

The federal government attempted to tempt state and territory leaders into signing up with a $100 million health innovation fund.

But ACT Chief Minister Andrew Barr described the $1 million the ACT would receive from the fund as "a rounding error, even for the ACT budget".

It's understood the ACT pitched a handful of health prevention projects as part of the funding negotiations, but a deal was not struck.

"The states and territories have been clear we're facing a significant budget challenge from growing health costs and we are in the business of delivering vital services for all of our residents and we need funding to keep pace with this need," Mr Barr said.

"For many states and territories the Commonwealth offer today falls short of what we believe is necessary to meet those growing health costs.

"Of course it's not too late for the prime minister to improve his offer and the ACT stands ready to continue negotiations we've undertaken so far today."

Prime Minister Malcolm Turnbull described the Commonwealth's funding offer as "generous" and said it would provide "stability and certainty" to public hospitals around Australia.

Mr Barr, as incoming chair of the Council for the Australian Federation (CAF), said state and territory leaders would begin to meet "independently of the COAG process" to pursue "our shared reform agenda".

He also revealed the states would begin negotiations about a consumption tax for online betting.

"We have determined as premiers and chief ministers to perhaps take the advice of a former West Australian premier and to undertake more work of our own, independent of the commonwealth and this will proceed through a series of meetings this year, including and importantly the work of our treasurers through the board of our treasurers to pursue a range of state based taxation and productivity reforms including for example efforts to harmonise a point of consumption tax for online betting," Mr Barr said.

Mr Barr said the ACT would also step up its campaign to repeal Andrews Bill, so the territory can legislate on voluntary assisted dying.

"It is simply absurd now for that legislation to remain now Victoria has passed its legislation," Mr Barr said.

As Western Australia agitates for a greater carve-up of the GST, Mr Barr said he believed the "status quo" would remain.

Mr Turnbull said Mr Barr was a "revolutionary when it comes to light rail in Canberra" but a "conservative when it comes to fiscal matters".