State premiers are at odds over whether the national disability insurance scheme (NDIS) should be scaled back, delayed or restructured.
The premiers are meeting with Prime Minister Tony Abbott in Canberra for the Council of Australian Governments on Friday.
The meeting comes a day after the national commission of audit recommended the full rollout of the $22 billion NDIS, due to start in 2018/19, be slowed and its budget trimmed.
The audit report pointed to a cost blowout of around $11,000 per person so far in initial trials of the scheme.
The scheme is based on agreements between the commonwealth and individual states and territories, as well as an overall nationally agreed framework.
West Australian Premier Colin Barnett said the commission's proposal had merit.
"It may be rolled out a little bit more slowly, that may not be a bad thing," Mr Barnett said.
"It may mean that what we end up with at the end of the day provides better services to people with a disability."
But NSW premier Mike Baird said his state, which has the largest trial program in the country, had an NDIS deal in place and expected it to be honoured.
"We have no intention to renegotiate the NDIS - it's an important agreement," he said.
Queensland Premier Campbell Newman said there was merit in the federal government taking full control of the NDIS.
"I see the NDIS as being part of the social security system in this nation," he said.
"Maybe the commonwealth should take full responsibility for that."
One of the two Labor leaders in the COAG room, South Australian Premier Jay Weatherill, said he feared the federal government could cut major spending programs by using the audit report as a smokescreen.
"It looks like a magician's wand, it's over here to distract the eye, while the real work goes (on) over here in the budget to get about the cutting," Mr Weatherill said.
A number of premiers backed the idea of states being allowed to raise revenue through an income tax surcharge, in return for taking more responsibilities for services like health and education.
National Commission of Audit head Tony Shepherd defended the report's recommendations, aimed at saving $70 billion a year.
They include a new $15 GP visit co-payment, restricting Medicare access for the well-off, cutting family welfare, further limits to access the age pension and slashing 15,000 public servant jobs.
"I think they're reasonable," Mr Shepherd he told reporters in Canberra.
"I think we've done it in a fair way (and) tried not to disadvantage anybody."
Liberal frontbencher Christopher Pyne tried to allay fears about how many of the recommendations would make their way into the budget, due on May 13.
"I think you'll find in the budget there won't be overall cuts to education, health and welfare but we obviously will reprioritise within our spending the programs and projects the coalition thinks are more important," he told Nine Network.
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