West Australian Premier Mark McGowan is urging the prime minister to intervene as the state pushes for more remote housing funds, dismissing federal Indigenous Affairs Minister Nigel Scullion as "junior".
The 10-year National Partnership Agreement on Remote Indigenous Housing expired on Saturday, and the state government wants Senator Scullion to improve his offer of $60 million over the next three years.
Mr McGowan labelled the offer a "divorce settlement", saying the federal government was abrogating its responsibility to isolated Indigenous communities after 50 years of sharing the costs with states and the Northern Territory.
"I think the prime minister has to himself engage on this issue and not leave it to his federal minister. His federal minister is relatively junior in these sorts of things," Mr McGowan told ABC radio on Monday.
"The prime minister himself and his staff need to show some interest in the welfare of Aboriginal people.
"Otherwise, all of their talk about closing the gap, all of the talk about trying to improve health and education outcomes, amount to nothing."
The federal government agreed in April to give the Northern Territory $550 million over five years for remote housing, which will be matched by the NT government.
The Queensland government has promised to contribute $1.08 billion towards a new agreement and requested proportionate cost sharing, but is yet to sign a deal.
Senator Scullion said on Friday discussions with the Queensland government were "very, very positive" and a deal with South Australia was "imminent".
Victoria, NSW and Tasmania have opted out of the program.
WA will rack up more debt or have to increase fees and charges if it is forced pick up the full tab, Mr McGowan said.