The federal government has told states and territories to go it alone in finding money to fix buildings covered in flammable cladding, in a move likely to cost property buyers.
Victoria wants the Commonwealth to pitch in $300 million to help remove dangerous cladding from hundreds of buildings, but federal Treasurer Josh Frydenberg says it's not Canberra's problem.
"We're not picking up the bill for what is a state responsibility," he said on Tuesday.
"The problem with cladding has come from a lack of compliance and enforcement at a state level.
"So, I say to the states, look in your own backyard, make sure it's fixed."
His comments follow Victorian Labor Premier Daniel Andrews' plan for a $600 million program to make safe about 500 high-risk buildings covered in flammable cladding.
The state government will stump up half the cash for the five-year project but wants federal help, citing a national problem.
"There needs to be a true national partnership to put community safety first, to rectify these most dangerous buildings, to keep Victorians safe and not to put this in the too hard basket," the premier said.
Mr Andrews announced a new body, Cladding Safety Victoria, to oversee the removal works after inspections of more than 2200 buildings by a task force set up after London's 2017 Grenfell Tower inferno, which killed more than 70 people.
If the federal government won't help Victoria, the state plans to make up the shortfall by increasing the building permit levy for high-rise developments worth more than $800,000.
Low-rise developments, such as townhouses, would be exempt.
The changes would add about $2200 to the cost of a $610,000 apartment currently under construction, calculations show.
"We are being up front about not putting forward a $600 million plan and only having funding for half of it. We've got both contingencies," Mr Andrews said.
Of the 500 Victorian buildings identified as high risk, work will begin within weeks to fix 15 deemed the most dangerous.
Mr Andrews declined to publicly identify those sites to protect against arson threats.
He also flagged a future crackdown to claw back money from construction companies which cut corners on building safety.
In NSW, the inter-agency Fire Safety and External Wall Cladding Taskforce has identified 629 buildings around the state which potentially pose an increased risk in the event of a fire.
"For this reason, these buildings have been rated as higher risk," a taskforce spokeswoman said in a statement on Tuesday.
The buildings have been identified for further assessment.
This risk rating does not mean the buildings are in breach of NSW regulations.
The use of aluminium cladding panels with a polyethylene core of more than 30 per cent is already banned in Victoria but this has been difficult to enforce.
In February a cigarette sparked a fire in a CBD apartment tower covered in flammable cladding.
The 40-storey NEO 200 building had previously been identified as "moderate risk" and inspected by the Victorian Building Authority.
Earlier this year, builders of the Lacrosse apartment tower at Docklands were ordered to pay owners and retailers $5.7 million.The building was covered in flammable cladding before it caught fire in 2014, also sparked by a cigarette.
Australian Associated Press