Assistant Treasurer Bill Shorten says states should not expect payments from the Commonwealth if they walk away from deals on national reforms.
Prime Minister Julia Gillard has threatened to hold out on $450 million of reward payments for some states and territories that are stalling on reforms such as uniform occupational health and safety (OH&S) laws.
Mr Shorten said on Friday Victoria and Western Australia "disturbingly" had indicated they wanted no part in the national OH&S model.
"We call on the Victorian and Western Australian state governments, in particular, to join the national economy," he told reporters in Melbourne.
"You can't want to be a part of the nation of Australia for some things but opt out other times for petty political reasons."
He said some of the bigger states were receiving payments of more than $100 million each while not honouring their deal with the Commonwealth.
"There are reward payments which are due to states if they keep their national partnership agreements," he added.
Mr Shorten said the proposed reforms were to help businesses active in several states to operate more seamlessly through less regulation on occupational health and safety, and the licensing of skilled workers.
"If you want to have a mobile labour force, then we have skills capable of being recognised throughout Australia," he said.
"If you want to have a business in more than one state, you should have the same occupational health and safety laws."
He said the cost of operating eight separate systems for occupational health and safety regulation in Australia was $43 million a week for Australian businesses, big and small.
