The architect of the goods and services tax, John Howard, says he understands why West Australians are upset about the State's rapidly diminishing share of its revenue and the issue must be tackled.
But the former prime minister, who took the GST to the 1998 election and won, predicted parochial self-interest by the States would make reform "very hard to resolve".
WA's share of the GST will fall to a record low 45ï¿½ in every dollar of tax raised in WA, according to Wayne Swan's Federal Budget handed down on Tuesday.
It is the first time any State's share has fallen below 50ï¿½. The Federal Treasury predicts it will fall to 35ï¿½ in 2014-15 before rebounding slightly.
Mr Howard said though he expected fluctuations from year to year, he did not anticipate any State's share would fall so low when he and then treasurer Peter Costello drew up the tax 14 years ago.
"I don't think anybody anticipated 14 years ago the scale of the mining boom," he said.
"I always knew that there would be fluctuations. I don't think anybody in 1998 or 2000 had in front of them projections as to how unequal the distribution would become."
Mr Howard said NSW used to complain about a pro-Queensland bias in the tax in its early years.
"It's an issue that's got to be tackled," he said. "But it will be very hard to resolve because all States get parochial. It will require a lot of skilful leadership from the Prime Minister and the premiers. Like all of these things, there will need to be a compromise."
He understood why people in WA felt as they did and why Colin Barnett was so upset with his State's share.
"I would be saying the same thing if I was Premier," he said.
"But more generally on the GST, I have to make the point if the Labor Party had accepted the verdict of the Australian people in 1998 and passed the GST in the form the public voted for, we'd have nine or 10 billion dollars more each year to distribute among the States."
A spokesman for Mr Barnett said the Premier had nothing to add at this stage to his extensive commentary on the issue.
Opposition Leader Mark McGowan said Geoff Gallop and Eric Ripper had argued for a floor in GST distributions at the time to protect WA but Mr Howard and then premier Richard Court failed to heed those arguments and signed the GST deal.
'It's an issue that's got to be tackled. But it will be very hard to resolve because all States get parochial.'" Former prime minister
- John Howard *