Labor has taken a timely dig at Prime Minister Malcolm Turnbull's plans to hand over a proportion of income tax to the states and territories, labelling it an April Fool's joke.

Mr Turnbull will meet state and territory premiers in Canberra on Friday to discuss the plan to reduce federal government income tax collection and allow states to raise revenue for hospitals and schools.

"It's just as well that the premiers and chief ministers meet with the PM and treasurer tomorrow on April Fool's Day because that's the credibility that Malcolm Turnbull brings to the table," shadow treasurer Chris Bowen told reporters in Sydney on Thursday.