PM Abbott puts roads on COAG agenda (AAP)

View CommentsFederal relations on COAG agenda

Prime Minister Tony Abbott has put new road projects at the top of the agenda for his meeting with state and territory leaders.

The Council of Australian Governments is meeting in Canberra on Friday, less than a fortnight out from the federal budget.

Mr Abbott told the leaders at the start of the meeting that infrastructure was one of the most significant agenda items.

"Our citizens expect us to make a difference," he said.

They also expected leaders to put political differences behind them and to work together to make a difference to their lives, he said.

COAG would be discussing ways for the federal government to support infrastructure through joint funding, as well as cutting red tape and encouraging private investment.

The national commission of audit, which released its report on Thursday, found state and local government were best placed to identify what major projects were needed and should retain this responsibility.

But the report said the commonwealth had a role in nationally significant projects and ensuring environmental and other regulations don't unnecessarily push up costs.

The Productivity Commission is looking at the issue and is set to report to the government on May 27.

COAG is also expected to discuss the national disability insurance scheme, overseas adoptions and reform of the federation.

It's the first COAG meeting for new Liberal premiers Mike Baird (NSW) and Will Hodgman (Tasmania).

Jay Weatherill (South Australia) and Katy Gallagher (ACT) will be the only Labor leaders in the room.

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