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$499m GST payday for WA road projects

$499m GST payday for WA road projects

Nine Perth road projects will share $499 million in extra funding under an Abbott Government bailout that will effectively keep WA's GST share at existing levels.

In a Federal Budget decision guaranteed to provoke a hostile reaction from Eastern States, Tony Abbott has agreed to throw more Commonwealth money at WA in recognition of its "particular challenges".

"This investment acknowledges the specific circumstances facing WA as a result of their GST revenue shortfall next financial year," the Prime Minister told The West Australian ahead of a lightning visit to Perth today.

WA's share of the GST will plunge below 30 cents in the dollar from July 1 - down from the existing 37.6 cents - throwing State finances into disarray.

Of the $499 million extra funding, $209 million will go to the Mitchell Freeway extension from Burns Beach Road in Joondalup to Hester Avenue in Clarkson.

The NorthLink WA project will get $138 million more, comprising $84 million for Tonkin Highway and $54 million for the Swan Valley bypass. And an upgrade of Reid Highway at Malaga Drive will get $67 million, making the project 80 per cent funded by the Federal Government.

Significantly, the money will not have to be repaid.

But in return for the bailout, Mr Abbott said the Barnett Government must "pursue further microeconomic reforms".

"WA will be able to access significant Federal incentive payments towards further investment in job-creating economic infrastructure, when reinvesting the proceeds of any privatisations into such infrastructure projects," Mr Abbott said.

It is understood WA Treasurer Mike Nahan will confirm plans to sell the TAB in next week's State Budget, as well as a few other taxpayer-owned assets.

The $499 million WA rescue might not be the end of Federal help with Finance Minister Mathias Cormann indicating there might be more next year.

Premier Colin Barnett and Dr Nahan demanded WA get $660 million to cover WA's GST shortfall over the next two years.

Senator Cormann, who negotiated the list of Perth infrastructure projects with Dr Nahan last week, said: "We will consider the following year (2016-17) once we know what the Commonwealth Grants Commission is actually recommending."

Mr Barnett said he appreciated Mr Abbott's acknowledgment WA was being treated unfairly.

"This is the first time an Australian prime minister has actually acted to compensate WA for its unfair share of the GST," he said. "We still face a tight Budget, but this will help.