Queensland’s premier has accused the Abbott government of using the budget to achieve a hike in the GST rate, and leaving the states to do the sell job.

Queensland Premier Campbell Newman is leading a state and territory revolt against an $80 billion health and education funding cut.

Mr Newman has dropped all party loyalty to accuse federal Treasurer Joe Hockey of using the decade-long funding reductions to wedge premiers into asking for a GST rise.

The premier is furious the slash wasn’t mentioned at the COAG meeting less than a fortnight ago, and premiers are demanding an urgent national meeting to talk Mr Hockey down.

Leading the charge as chair of the Council for the Australian Federation, Mr Newman has the backing of NSW Premier Mike Baird, Victoria’s Denis Napthine, South Australia’s Jay Weatherill and Northern Territory Chief Minister Adam Giles on board.

“We’re all in agreement … this is not acceptable,” Mr Newman said.

“The issue is that a fair share of the income tax that Queensland families pay should come back to pay for their hospitals and schools.

“It is not fair, it is not reasonable and it is not in the spirit of a reforming federation the prime minister has talked about.”

Under the changes, health and education funding will move to a less generous model in 2017 and 2018, based on CPI and population growth.

Freezing indexation payments to local governments will also increase strain to already stretched councils.

Treasurer Tim Nicholls says CPI will not meet the needs for Queensland’s anticipated growth.

Mr Nicholls says the state’s already in pains to pay down $80 billion worth of debt and has little capacity to absorb any enormous shock.

He insists he won’t cut services again to make up the shortfall, after massive job and service culls two years ago.

“We are dealing with Queensland’s problems and I think it is incumbent on the federal government to come to us with their proposals to deal with their problems,” he said.

“To simply reduce expenditure or reduce grants to the states to force an outcome isn’t something that is conducive to those good relationships.”

There was a silver lining for Queensland in the federal budget.

It will receive a record $13.4 billion over seven years to upgrade the Bruce Highway, Gateway Motorway North, Toowoomba Second Range Crossing and the Warrego Highway to name a few.

Another $156 million will be spent on permanent infrastructure for the 2018 Gold Coast Commonwealth Games and another $40 million for a reef future fund.