Premier Colin Barnett has labelled the analysis used to downgrade WA's credit rating as "very weak" and accused the author of inaccuracies.
Speaking to reporters in the Mid West town of Dowerin today, Mr Barnett said he did not disagree with rating agency Moody's decision to downgrade WA's credit rating from AAA to AA1.
But, he said, he disagreed with the analysis behind it.
"For example they describe our State Government deficit, we haven't had a deficit, we've been in surplus for every year of this Government," Mr Barnett said.
"It's getting harder (to stay in surplus) . . . but simple errors like that . . . to describe the GST as a benefit to WA is ludicrous - that's our problem.
"I think their analysis - I don't argue with their decision on the downgrade - but I think their analysis was very weak."
Moody's cut its WA rating to Aa1 on Monday and warned it could be cut further if there was no strengthening in the "Government's resolve".
The Moody's decision follows a move by Standard and Poor's to cut WA's credit rating from AAA+ to AA+ in September.
Responding to questions on whether the Government could do more, Mr Barnett said WA did not have a big debt ratio compared to other Australian States and continued to blame WA's GST share.
"We have the lowest debt-to-revenue model of any mainland state," he said. "So the debt is manageable. Our biggest problem is the volatility of our income, being with iron ore prices and agricultural prices and then like.
"But our biggest fundamental problem is the rotten deal out of the Federal Government on the GST."
He said planned asset sales would be announced next week.
"We will have to make some cuts to expenditure, but there won't be any sense of panic," he said.
"WA is the strongest economy of any Australian state, we have the highest growth, the highest investment, the lowest unemployment the most trade and so on . . . so we're not going to go into panic."
Shadow treasurer Ben Wyatt said the comments showed Mr Barnett had "a completely flawed understanding of his own Budget position".
"He (Mr Barnett) doesn't even seem to know that it's the cash deficit that Moody's is talking about," he said.
"Moody's was doing what they do consistently across all governments - they look at the cash position. And the reality is we haven't been in surplus on that (cash) measure since 2007.
"Until the Premier takes responsibility, the finances aren't going to improve.
"Either he has no understanding of his actual budget position, or he was cynically trying it on with a journalist who may not know what he was talking about.
"It just strikes me with great concern that he actually appears to be of the misplaced view that the Budget is actually in a much stronger position than it really is."