The political honeymoon enjoyed by the Baird government since its re-election in March could come to a screeching halt from next week.
State and territory leaders will gather in Sydney for their meeting with prime minister Tony Abbott, aimed at fixing the federation's finances with a focus on the tax system.
Mike Baird is well aware NSW is being sacrificed by Tony Abbott and Joe Hockey to help prop up their disastrous 2014 budget.Credit: Edwina Pickles
We've have heard the complaints from the states and territories about the inequitable and overly complex formula for distributing the GST for many years.
But this meeting has additional significance as it has been convened to address the billions of dollars ripped from state and territory health and education budgets by federal treasurer Joe Hockey in 2014.
The pressure is particularly on for NSW Premier Mike Baird and his new Treasurer Gladys Berejiklian.Credit: Wolter Peeters
The relationship between the states, territories and the federal government is at crisis point.
The pressure is particularly on for Baird and his new Treasurer Gladys Berejiklian, thanks to their uniquely close relationship with Abbott and Hockey respectively.
When Hockey announced his cuts, Baird memorably declared it a "kick in the guts" for the people of NSW.
But since then he has done nothing beyond mouthing platitudes about the need for constructive dialogue with the Commonwealth.
It's an approach that has allowed Labor to highlight how close Baird and Berejiklian are to their federal counterparts and ask the legitimate question: is this cosy relationship what is holding them back?
Baird and Berejiklian are well aware NSW and the other jurisdictions are being sacrificed by Abbott and Hockey to help prop up their disastrous 2014 budget.
They also know Abbott and Hockey are using the cuts to force the states and territories into owning unpopular changes to the rate and base of the GST, as neither has the courage to do so themselves.
And all the while there's a fiscal train hurtling towards NSW from when the cuts to federal funding to health and education kick in from 2017, as starkly evidenced in Berejiklian's first budget in June.
The fact is that more than any other political leader, Baird has the ability to lead in this debate.
Post-election victory and with a massive infrastructure plan on track, his stock of political capital is overflowing.
Yet on Thursday, when asked when he was going to demand of Abbott next week, Baird again adopted a conciliatory posture, declaring he would be "very constructive".
Given that historically NSW Premiers have never seen a Prime Minister with whom they aren't willing to go to war for the local political boost that usually accompanies it, it's an unusual approach.
Despite his coyness to outline exactly what he'll take into the meeting, some of Baird's positions on state-federal tax reform are reasonably well-known.
On the GST he favours a shift to a per capita model of distribution which would see NSW's take reflect the cost to the health budget and elsewhere of our larger population.
Baird's other idea is to allow the states to leverage a proportion of income tax.
But on the question of whether the rate of the GST should be increased or its base broadened he pulls his punches, preferring to simply suggest it should be up for discussion.
It could be time for Baird to rethink this approach, because as 2017 draws nearer it's going to become harder and harder to explain away a lack of success.
If trying to talk matters through with his "mate" Tony Abbott doesn't work, sooner or later the NSW public are going to demand Baird to drop the nice guy act to produce results.
Just a couple of weeks ago Baird was lecturing other political leaders on how to manage difficult public policy following his success at getting his contentious electricity privatisation plans through an election.
His recommended approach? Be upfront with the public about the challenges faced and open and honest about the solutions required, even if there's some pain attached.
For this you are rewarded, he suggested.
On Thursday Baird hinted that he might finally be preparing to heed his own advice in relation to the state-federal funding debate.
"[The public] want a debate that tells frankly and honestly what are the challenges we face and what are some of the solutions to deal with those challenges," he said. "That's what I'll be doing".