THE West Australian and Tasmanian premiers have traded harsh words, with Lara Giddings saying the mining-rich state's push for a greater share of the GST goes against the spirit of Federation.
The GST is currently distributed using the "horizontal fiscal equalisation" system, which aims to ensure states and territories have enough money to provide services such as education and health of the same standard.
But WA Premier Colin Barnett has been pushing for the GST to be distributed on a per capita basis, saying the state is being ripped off.
Tasmania's Labor Premier says the Liberal leader is crying poor "despite rolling in the massive royalties of the mining boom".
"It's often forgotten that as recently as 2007, Western Australia was in the same position as Tasmania - a net beneficiary of GST, propped up by NSW, Victoria and Queensland," Ms Giddings told the National Press Club in Canberra on Wednesday.
"If you shift resources to Western Australia, it has to come from somewhere and it will come from Tasmanians, the state that can least afford to give money to the richest state.
"That a Tasmanian living in Launceston or Hobart or Burnie or Devonport should have a different level of service when it comes to education, police, health than someone in Subiaco or Fremantle or indeed Kalgoorlie, it's just wrong to think that there should be two streams of Australians in this nation.
"It's just not Australian. That's not what Federation is about."
Mr Barnett fired back, saying: "she should look at the Tasmanian economy".
"They should be doing a lot, lot better," he said.
"You know when I leave this job maybe I'll go down and hire myself out for a year to run Tasmania.
"It wouldn't take much to get the Tasmanian economy moving."
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