The federal and state treasurers are expected to hammer out an in-principle agreement to the recycled assets proposal, which would push states to sell publicly owned assets and invest the returns in new productive infrastructure such as roads.

At least one state, South Australia, has shown reluctance to take part in the plan, but NSW, Western Australia and the ACT are among the states and territories that are open to options put forward by Mr Hockey.

"The individual states don't have to sign up but they'd be mad if they didn't," Mr Hockey said on Friday.

"I say to the states you can sign up or you don't have to. It's first-in, first-served."

Before Friday's meeting of treasurers in Canberra, NSW Treasurer Mike Baird said the proposal, which would effectively incentivise privatisation of public assets, was "not about ideology".

"The option is if you want to build infrastructure you can look at old assets and turn them into new assets," he said.

"This is about delivering infrastructure that people across Australia desperately need."

But South Australian Treasurer Tom Koutsantonis said he was worried about the plan as he did not necessarily believe "it's the best thing to be doing to encourage the states to privatise assets".

The ACT's treasurer Andrew Barr said the proposal could also prove less lucrative for some states, such as Victoria, which had already gone through an extensive process of privatisation without receiving incentives from the Commonwealth to do so.

In the case of the ACT, the territory's Labor government is open to the potential sale of some older public land holdings, but Mr Barr said there was unlikely to be enough incentive to sell off more lucrative assets, such as the ACT's water utility ACTEW.

Queensland Treasurer Tim Nicholls said he was looking forward to seeing what incentives the Commonwealth had to offer on infrastructure. He also noted Queensland had a debt bill of $80 billion.

The state was facing having to increase fees, taxes and charges, or to reduce services and recycle capital from some government-owned businesses, to pay it down.

''Anything that can assist us in terms of investing in the future infrastructure that a growing state like Queensland is going to need over the next 10 to 20 years is something that we are very keen to talk about,'' he told reporters.

Friday's meeting is also expected hammer out further investigation of the cost benefit of lowering the GST threshold on goods purchased from overseas retailers online.

Treasurers will also consider the Commonwealth Grants Commission's recommendations on the distribution of GST, with larger states such as WA complaining that they continue to subsidise smaller jurisdictions.

with AAP