Amid heated debate about the future of the stage three tax cuts, ACT Chief Minister Andrew Barr has proposed a 1 per cent increase to the Medicare levy for the highest income earners, in a bid to better fund the nation’s struggling health system.

Addressing a revenue summit on Thursday organised by progressive think-tank The Australia Institute, the Labor leader warned that health spending was the fastest-growing share of state budgets and that the hospital system faced a question of ongoing sustainability.