Queensland Premier Annastacia Palaszczuk won't "necessarily" open the state borders once 80 per cent of eligible people are vaccinated, saying hospitals need to be ready for a surge in COVID-19 cases.
Prime Minister Scott Morrison has accused the state of trying to "extort" or hold the Commonwealth to "ransom" by refusing to open the borders unless it was given more federal funding for hospitals.
Ms Palaszczuk denied this, noting every other state and territory health minister had last week jointly signed a letter raising funding issues with the federal government.
"We want to make sure that, you know, that our hospitals are getting ready," she told reporters on Tuesday.
"You only have to see what's happening in NSW and Victoria ... the huge pressure that the staff are going to be under, and they're constantly under this pressure.
"When we do have a large outbreak of Delta in this state there's going to be added pressure, and that's not just happening in Australia, it's happening across the globe. These are unprecedented times."
Queensland's hospitals are already facing huge capacity pressures with The Australian reporting on Tuesday there were 31 'code yellows' - when hospitals start to run out of beds and ambulances are forced to divert to other emergency departments - in September.
The premier said reopening the state borders wasn't tied to federal health funding and would not be automatic once 80 per cent of eligible Queenslanders were fully vaccinated.
"Not necessarily, it depends on the situation of the day, it depends on what's happening in NSW and Victoria, so we are watching all of those issues very closely," Ms Palaszczuk said.
Mr Morrison said there was already enough federal funding for Queensland hospitals and that the premier was trying to use state border closures to "extort" more cash.
"She has to take that up with the Queensland people then," he told Nine Network on Tuesday.
"To go down this point and say: 'Well, you know, I'm going to hold the federal government to ransom and seek to extort from them money on the basis of COVID' - I just don't think is the right way to go."
The Commonwealth had contributed to half the cost of propping up state and territory health systems against COVID-19, Mr Morrison said, a commitment which totalled about $30 billion nationwide.
"Of course there are challenges, but as a state government they've got to be responsible for their state health system," Mr Morrison said.
"NSW is getting on with it, so are Victoria and the ACT, so Queensland needs to get on with it."
Queensland Health Minister Yvette D'Ath stressed the request for fresh talks on federal funding for state hospitals was a joint proposal from all states territories, not just Queensland.
It was incorrect for the prime minister to categorise the health funding debate as a Queensland issue.
"This is a national conversation, it's not a fight between the Commonwealth and Queensland," Ms D'Ath said.
"It is every single state and territory, saying that our health system was under extensive pressure and demand prior to COVID that required a rethink In the funding model going forward."
© AAP 2021