Queensland's health minister has defended gag orders on not-for-profit groups that receive state funding and has told the federal government to butt out.

The federal government will introduce a new bill which would ban gag clauses from all commonwealth contracts with the not-for-profit sector.

It plans to write to state and territory leaders asking them to match the federal commitment.

Federal Finance Finance Minister Penny Wong has called the Newman government's gag orders "nothing short of draconian".

"First, the Newman government cuts funding to those without a voice and then silences those who speak on their behalf," she said.

But Queensland Health Minister Lawrence Springborg said not-for-profit groups should not be wasting their time and money on political advocacy.

He said the federal government should stop trying to interfere.

"We will decide how public money is spent in Queensland," he said on Monday.

"In Queensland we believe that if we give money in Queensland Health to an organisation, then that organisation should be doing what we fund them for.

"Not running around with political advocacy."