Queensland's Labor government says it needs to see more detail of a planned redistribution of GST revenue before it trusts the shakeup won't leave the state worse off.
Under the eight-year, $7 billion plan outlined by Treasurer Scott Morrison on Thursday, no state would be worse off, with Queensland to receive a $518 million boost on top of the GST revenue the state is already allocated.
But Premier Annastacia Palaszczuk said they need to see the fine detail of the plan, with the extra billion dollars a year to be injected into the pool of GST money expected to put pressure on the federal budget bottom line.
"You can't suddenly come up with a magic pudding of $7 billion," she said.
"The money has got to come from somewhere."
The extra funding will be "untied" meaning the state government can use it however it wants, but the premier said they were concerned services will be cut in order to pay for the state's share.
"Our Treasury officials are saying that we could lose up to $500 million a year," the premier said.
Queensland Liberal National Party Deputy Opposition Leader Tim Mander said he "trusted" his federal colleagues to make good economic decisions.
"Those grants that have a term, it's more than reasonable that those things are reviewed," Mr Mander told reporters on Wednesday.
"We've been guaranteed that Queensland will not be worse off over the next eight years, we'll be better off."
"That's something we've been lobbying for from the opposition's point of view and we;'re very happy with the way that's been delivered today."
The productivity commission had recommended $12.6 billion extra be given to NSW at the expense of Queensland and Victoria, but the federal government rejected that plan in favour of topping up all the GST allocations.
State and territory treasurers will meet in September to discuss the plan with a final agreement expected by the end of 2018.
