Queensland Premier Campbell Newman insists the state has no extra money to spend on disability services, as to do so would push its debt towards that of Spain.
Mr Newman is in Canberra on Tuesday ahead of the Council of Australian Governments meeting on Wednesday, which is expected to focus on the national disability insurance scheme (NDIS) and education funding.
While other states have put in comprehensive bids for NDIS trial sites, funded by the $1 billion the federal government has put on the table, Mr Newman said Queensland has a role to play but no money to offer.
He said the previous state Labor government had left the state in a financial mess.
"We have a $47 billion budget but we have an operating deficit of $2.8 billion ... if we had the money it might be a different matter.
"I'm saying that if we fail to act in a way that we are that Queensland would ultimately be the Spain of Australian states.
"But that's not going to happen because we are taking tough decisive action."
Mr Newman said Prime Minister Julia Gillard, who will chair the COAG meeting on Wednesday, had raised expectations of the NDIS "in a quite cruel and cynical way" without knowing where the money would come from.
Queensland would be putting forward a proposal to have the southern city of Gympie host an NDIS trial site.
Mr Newman said he would like to see COAG focus on improving the national economy.