Treasurer Joe Hockey says he has won the support of his state counterparts for the mass privatisation of government-owned assets in exchange for federal funding for new roads, ports and rail lines.

Mr Hockey says the agreement is subject to the approval of the premiers but treasurers backed his plan to recycle infrastructure capital by building new assets funded by the sale of old ones.

"None of us could see any reason why the leaders would not agree to it," he said shortly after his meeting with treasurers in Canberra.

He says the concept would see the Commonwealth activate a "pool" of money from which the states could draw 15 per cent of the value of their privatised assets over five years.

But he says the money would be subject to several conditions, including that it funds the construction of new "productive" infrastructure, above what state governments are already promising.

He says the money would be "time-limited" to the next two years, during which the states would have time to strike bilateral agreements with the Commonwealth setting out which assets would be sold and what projects the proceeds would fund.

"This is time-limited, this is a one-off pool," Mr Hockey warned.

"The net outcome will be tens of billions of dollars of new additional infrastructure in Australia. We need to get on with the job."

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He says the Commonwealth would not place restrictions on the types of assets which could be sold off or whether they would have to be fully privatised to qualify for the funding.

"We are not setting ridiculous rules about this because the end game is that we need to build this infrastructure fast," he said.

SA Treasurer voices reservations about plan

Speaking outside the meeting, conservative treasurers welcomed the idea but South Australian Labor Treasurer Tom Koutsantonis remained cool towards the plan.

"I'm glad I've finally got to meet Joe Hockey," Mr Koutsantonis told reporters outside Parliament House.

"He's pretty hard not to get along with; he's a very affable fellow."

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But the South Australian Treasurer said his regard for Mr Hockey did not extend to his infrastructure proposal.

"Today's decision by the treasurers to encourage states to sell public utilities in exchange for infrastructure spending is not something I am going to stand in the way of but I'm not saying necessarily that I'm going to participate in," he said.

He scoffed at the amount on offer and said it was inappropriate for the Federal Liberal Government to demand that "beloved" assets like South Australia's water utilities be sold off, particularly given they provide dividends to state governments.

"Quite frankly, if I went back to my community and said we're going to sell a public asset for $14 billion in exchange to get $140 million or $1.4 billion to spend on something Joe Hockey wants us to spend it on I don't think people would appreciate that," Mr Koutsantonis said.

Mr Koutsantonis said he was reassured by Mr Hockey's promise that existing infrastructure spending would not be cut as part of this plan, but he maintained it disadvantages governments who do not support privatisations.

Victoria also says it is being short-changed because it will not be rewarded for having already done a lot of the "heavy lifting" when it privatised assets during the 1990s.

Liberal Treasurer Michael O'Brien says he will not stand in the way of the idea either but says Victoria is let down by the plan.

"We would certainly prefer that there be some recognition that Victoria and other states including South Australia have done a lot of the heavy lifting when it comes to economic reform and asset recycling," he said.

"Federal Treasurer Joe Hockey made clear that he wasn't prepared to look backwards in these matters.

"I think there should be some recognition that Victoria doesn't have the same range of options when it comes to asset recycling."

WA enticed by 'two powerful incentives'

Ahead of the meeting, conservative Treasurer Mike Nahan played down the prospect of Western Australia participating because of the need to pay down that state's debt.

But speaking after the gathering, Mr Nahan said the Commonwealth's "two powerful incentives" on offer were enticing.

"There's an offer there with a significant incentive, 15 per cent of of the sold asset value and quarantined from the grants commission," he told reporters.

"Those are two very powerful incentives, both to look at asset sales and to encourage new capital.

"We have an asset program that we're developing; we will use that asset program to pay down debt but we might participate in Joe Hockey's program.

"We intend to look constructively at Joe Hockey's proposal and I think all the treasurers went away quite pleased with it.

"It doesn't mean we will use it, we might indeed sell some assets and put it totally towards debt but that's a decision for our Cabinet."

Queensland LNP Treasurer Tim Nicholls said the treasurers' meeting was the most productive he has attended in his two years in the job.

"We still have to go back and seek a mandate should we proceed down the path of recycling capital and we're having that discussion now," he said.

"So it certainly gives us hope that the Federal Government wishes to invest in infrastructure and assist us do that and that's a good thing."

New South Wales Treasurer Mike Baird reiterated his Liberal colleague's praise of Mr Hockey.

"I've been coming down for over three years to these meetings - undoubtedly the best treasurers' COAG that we've had," he said.

He said Mr Hockey's plan mirrored what New South Wales had already been doing to stimulate the construction of new infrastructure.

"They have said they are open to any proposal to come forward, what they are trying to do is to get additional jobs on the ground and additional infrastructure built as quickly as possible," he said.

"And we absolutely support that."

Mr Hockey is refusing to say how much federal funding is on offer but says the amount will be revealed in the May budget.

The Government says Australian superannuation funds will be the biggest buyers of state assets.