The federal government's new loan facility for developing northern Australia isn't good enough, Queensland's treasurer says.
The Abbott government's second budget provides $5 billion to fund loans to northern states and business for development infrastructure in the region.
Queensland Treasurer Curtis Pitt says there's little appetite for loans that have to be paid back and the federal government should instead jointly fund projects with the state government.
West Australian opposition leader Mark McGowan agrees with Mr Pitt.
"A loan scheme? I mean seriously. We can borrow money and pay it back at some point in time," he told reporters.
"It's absolutely smoke and mirrors designed to hide the big cuts to schools and hospitals."
Fortescue Metals founder Andrew "Twiggy" Forrest was impressed with the plan, however, describing Australia's north as "the great new economic frontier for the country".
"There'll be a great economic push there, I think," Mr Forrest told the ABC.
"There are huge resources up there."
He said water supply consistency was a problem but that could be "ironed out".
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