Kevin Rudd unveiled Labor's $1 billion water policy in the Queensland seat of McPherson, during a visit to a local desalination plant construction site over the weekend.

The plan includes a 10 per cent water tax credit, and grants for major desalination and water recycling projects.

Donning a fluoro yellow safety vest, hard hat and goggles, Rudd said Labor would also create a centre of excellence for desalination based in Western Australia, and a centre for water recycling in Queensland.

"State and territory have obviously run into difficulties with various projects over time, that's true," he said.

"The Federal Government has said, 'your problem, not ours', that's simply not helpful.

"The nation is sick and tired of buck-passing."