WA Treasurer Mike Nahan says there is "no way in hell" he will succumb to pressure from Joe Hockey to pump more money into infrastructure rather than pay off debt.
Ahead of his first meeting with the other treasurers, Dr Nahan rebuffed the Federal Government's plan to have States sell key public assets to pay for new roads, railways and social infrastructure.
Federal Treasurer Mr Hockey will meet his State and Territory counterparts today, with the key item being his proposal for mass privatisations.
He plans to use proceeds from selling Medibank Private to help offset the Government's infrastructure program. But Dr Nahan said he had little inclination to do this.
The loss of the State's AAA credit rating meant the WA Government was focused on using revenue to pay down debt.
Dr Nahan, who only became Treasurer a fortnight ago, said with a $25 billion capital works program under way, the Government was already investing heavily in infrastructure.
"What Mr Hockey wants us to do, we have already done," he said. "But there is no way we are going to commit to new infrastructure projects to get a little bit back from Canberra."
WA is one of the last State governments to own electricity assets but Premier Colin Barnett has effectively rejected privatising them. Ports, desalinisation plants and possible toll roads are also being pushed as options for privatisation.
Dr Nahan said he might negotiate on the Federal plan but only if Canberra recognised WA's previous investments.
The WA Government is still reviewing possible asset sales, though it is understood Dr Nahan wants to ensure there is no simple transfer of ownership between government bodies.
The ratings agencies worried about the State Government's debt levels are also looking for the new Treasurer to show spending discipline and a way to deal with volatility in iron ore royalty revenue.
Iron ore prices fell in the past month to about $110 a tonne while the Australian dollar edged up to US92Â¢, putting more pressure on the State Budget and Dr Nahan.
Mr Hockey pushed his debt-infrastructure plan yesterday, saying it would deliver productivity benefits and jobs.