WA's advantageous GST deal defies logic, one state treasurer has argued as the revolt against the beneficial arrangement continues.
NSW Treasurer Daniel Mookhey fronted the Productivity Commission on Monday, a month after the organisation released a scathing interim report that found the "perverse" carve-up was costing federal taxpayers $6 billion a year to line WA's pockets.
That prompted WA Premier Roger Cook to lash the commission and call the report's authors "east coast clowns".
Mr Mookhey said states were being asked to accept conflicting propositions - that WA is the powerhouse of the national economy, and also requires permanent protection from Australia's equalisation system.
"Both cannot be true," he told the commission.
"There is nothing wrong from WA benefiting from its natural endowment, but a powerhouse economy should not require a privileged place in the national federation."
Mr Mookhey said the current system essentially allowed WA to operate by one set of rules while all other states were governed by another, arguing that when WA experienced a boom, it kept its money, but states such as Queensland and NSW were forced to share.
"We accept that NSW ... will always be a donor state and support the smaller states, and we’re happy to do so … that is something that we accept we have to do," Mr Mookhey said.
"I would only argue that it shouldn’t just be us."
Mr Mookhey claimed WA was on track to be one of the richest governments in the world - a privilege that would continue to compound, resulting in the state experiencing a higher quality of services and life than the rest of the country.
He said WA's position allowed it to try to lure activity from other states, citing the state government's bid to host the NRL grand final as an example, despite it being a game "they don't even play".
NSW Premier Chris Minns has previously criticised the state's grand final bid, comparing it to the actions of oil-rich Gulf states such as Saudi Arabia and the United Arab Emirates.
The federal government has affirmed its commitment to maintaining the existing system despite growing concern from the states and the commission's findings, which recommended a return to the pre-2018 system.
"There will be no change to WA's GST arrangements whilst I'm prime minister," Anthony Albanese said in August.
