NSW Premier Kristina Keneally wants changes to the national flood levy, saying it should take into account the high cost of living in Sydney.
The one-off levy will see taxpayers paying between $1 to $5 a week to rebuild flood-affected areas.
But Ms Keneally said she was going raise the issue of adjusting the tax for Sydneysiders when the Council of Australian Government (COAG) meets next month.
"The commonwealth has sought to calibrate this levy in order to ensure those who can afford more do (pay more), I would encourage the commonwealth in that calibration process to consider the differential impact on families in Sydney," she told reporters in Sydney on Friday.
"The commonwealth, before they lock this levy in stone, may do well to consider some fine tuning ... what we know is that mortgages are higher in NSW on average and other costs of living are higher than other capital cities like Adelaide and Perth."
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Ms Keneally said that adjusting the levy would help working families in NSW, particularly in western Sydney, who are "already feeling significant cost of living pressures".
"Families really are doing it tough ... many in NSW have already given so much in charitable giving and will have to pay more through rising food and other costs as a result of the floods," she said. The next COAG meeting is scheduled for February 14.
Ms Keneally also said the federal government would withhold $100 million of funding for the Northern Sydney Freight Line so the funds can be spent on flood reconstruction.
"We haven't received any indication that other infrastructure projects will face cuts," she said.
