State and territories have swung their weight behind a Ken Henry-led push to review and overhaul a “mess” of state and federal spending responsibilities, in a move economists and business groups say would lead to a broader and overdue national tax system overhaul.

As productivity experts decry a flat-lining tax reform agenda, state treasurers backed Dr Henry’s call for a “foundational” overhaul of how tax and spending are divided up nationally in areas including education, health and infrastructure.