Queensland's treasurer has accused the federal government of "bullying" by giving away the state's infrastructure funding to Western Australia and the Northern Territory.
The federal government says a $1.2 billion investment set out in the Northern Australia white paper will be partly funded with $800 million that Queensland had been allocated under the asset-recycling scheme in which the state refuses to participate.
Queensland Treasurer Curtis Pitt says he's prepared to work with the federal government but giving away his state's money because it won't sell assets is bullying.
"We now have it in black and white that Tony Abbott is prepared to rip infrastructure funding out of Queensland and gift it to Western Australia and the Northern Territory," Mr Pitt told AAP.
"The Abbott Government seems intent on trying to bully Queensland into selling assets when its clear that's not what Queensland wants."
State crossbencher Robbie Katter, whose Mount Isa electorate covers a vast area of the north, said the Commonwealth's focus on the north was positive.
He wanted to ensure that money was available to local businesses and farmers, not just large corporations and institutional investors.
But the Katter's Australian Party MP couldn't understand the federal government's logic of trying to force the state to sell public assets, while at the same time proposing to build new assets.
"They want us to sell the utilities we currently use to create and support our industries to build other industries. That just defies logic," he said.
Mr Katter said instead of using cash allocated for Queensland to fund infrastructure in WA and NT as well, the Commonwealth should borrow money to develop the north.
"Even (former Treasury Secretary) Ken Henry said it's perfectly acceptable to use public debt to construct industry-creating infrastructure," he said.
"The federal government should do it and show they're serious about this plan."
The state Liberal National Party has expressed whole-hearted support for the plan, despite its opposition to asset privatisation.
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