Treasurer Scott Morrison says he can give an absolute guarantee that no taxpayer will end up paying more under the deal to give states and territories power to raise their own funds.
Mr Morrison said that guarantee would apply for the next term of parliament and "the transition period".
He said the proposal the government was putting to the states would be for the Commonwealth to reduce taxes by a certain amount and for the states to be able to raise the same amount to fund schools and hospitals.
But the premiers and state ministers, who meet in Canberra on Friday to talk tax, appear set to turn down Malcolm Turnbull's proposal to allow the states to levy a portion of income tax to fund schools and hospitals.
But they will take away from Friday's Council of Australian Governments meeting an interim deal on health care funding.
Mr Morrison said what had changed was that the Commonwealth was telling the states they were sovereign governments, not branch office of the Commonwealth.
"If the people of that state don't think that their education minister is better placed to run their schools in their state and make the right choices about their schools and their states, well they shouldn't vote for them," he told ABC television.
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