Premiers have been quick to play down Malcolm Turnbull's proposed tax overhaul to end the funding blame game between federal and state governments.
The prime minister wants to reduce the federal government's income tax collection, allowing the states and territories to collect the remainder to fund services like hospitals and schools, instead of going cap-in-hand to Canberra.
But already there are doubts some states will get on board.
NSW Premier Mike Baird says he disagrees with the plan to allow states to levy income tax, SA's Jay Weatherill says it won't work and Queensland wants to see more detail.
Victorian premier Daniel Andrews dismissed the idea as a "tax policy thought bubble".
Mr Turnbull says the radical plan will end the blame game, make clear who is responsible for what and make state governments accountable.
"What we are talking about is the most fundamental reform to the federation in generations," Mr Turnbull told reporters in Sydney on Wednesday.
"Right at the heart of the problems in the federation is the fact that the states do not raise enough of the revenue that they spend.
"They are not accountable enough in the way a government should be."
The extra revenue the states earn will be offset by cuts to federal grants.
For now, states would be limited by how much they could raise and workers wouldn't see a difference in the tax they pay.
But in future, states could lower or raise income taxes to cover their costs.
"If a state government, over time, wants to raise more money by lifting tax, it will be answerable to the public just as we are to the people of Australia," Mr Turnbull said.
He denied the plan would disadvantage smaller states and insisted he'd received positive feedback from the states and territories so far.
But Mr Baird said while he would consider a plan, he was anxious about the prospect of Australians paying more tax.
"While I have historically argued for a share of income tax for the states, this has not involved increasing the income tax burden on Australian households, which already have among the highest income tax rates in the world," he said in a statement on Wednesday.
Mr Weatherill said states handed over such powers in 1942 and he doesn't favour taking them back.
He doesn't envisage other states taking up the offer either.
"The idea of the states having their own income taxing powers again and creating some form of double taxation is just not practical and I don't think it would work," Mr Weatherill said.
Queensland Premier Annastacia Palaszczuk wants more detail, saying all she had from the prime minister was a "blank page".
Opposition leader Bill Shorten described the plan as "silly" and guaranteed it would not be Labor policy.
Mr Shorten said the government was looking for a hospital funding bandaid before the election and solving its problem by increasing taxes on Australians.
Greens leader Richard Di Natale accused the government of political cowardice, dumping its budget problems on the states and territories.
State premiers and territory chief ministers will be briefed on the plan when they meet with Mr Turnbull in Canberra on Friday.
Treasurer Scott Morrison said it was important not to "jump ahead" of the discussion.
Asked whether states would eventually be able to hike income tax rates, as stated by Mr Turnbull, Mr Morrison told Sky News: "The prime minister, I don't think, has gone that far."
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