Kevin Rudd says he cannot offer WA a greater slice of GST, saying the State will have to ride the ups and downs of an independent assessment of States' ability to raise their own revenue.
In an interview with The West Australian, the Prime Minister acknowledged that many in WA felt the State was being treated harshly but said this was not always the case.
"I understand the public's concern about this, but as you know, people's experience with the Grants Commission over time show that at one period in time, WA was a huge beneficiary of the Grants Commission methodology," he said.
"At a later stage it was not a huge beneficiary - same in Queensland by the way - therefore, this is ultimately a matter for the Grants Commission."
May's Budget showed WA's share of the GST would fall to a record low 45Â¢ in every dollar of tax raised in WA in 2013-14 - the first time any State's share fell below 50 cents.
Federal Treasury predicted WA's share would fall to 35 cents in 2014-15 before rebounding slightly the years after.
Mr Rudd said that WA faced a big challenge in the slowing demand from China for the State's resources.
"I think people in WA know that the China resources boom is coming off. In fact, as I've said most recently, it's over," he said. "There is big adjustment flowing through to the Australian economy and the WA economy.
"That's just the reality.
"So for WA we have a massive task ahead of us, and for the rest of the country, in making for that adjustment."
Mr Rudd said the "sustainable" fall in the Australian dollar was an advantage because it would help the non-mining parts of the economy, including WA's farm sector, make inroads in overseas markets.
He cited the Government's investment in the Ord, done during his first term as prime minister, as an example of the way the State's economic base could be diversified.
But more was needed.
"There is a very large domestic adjustment task to be taken and I'll be working closely with WA colleagues to make sure that adjustment process is as successful as it can be," he said.
Mr Rudd said being a Queenslander helped him understand that WA psyche.
"They're actually both different from each other and are both radically different from the rest of Australia. I get that and I get that intuitively," he said.
"The thing is, in (WA), because of the impact of iron ore in particular, it is a much larger slice of gross State product than Queensland with its preponderance of coal."But I get it and I think it's one of the wisdoms you learn on the road which is how to deliver responsibly to the WA community."