Premier Colin Barnett has stepped up the war with Canberra over the State's cut of the GST, warning WA was at "the bottom of the barrel" and future resource projects were at risk unless the issue was resolved.
Mr Barnett said the cuts, which will see WA's share of every $1 of GST raised within WA likely to be cut by about a quarter to well under 60¢, would force the WA Government to slash $600 million worth of spending from the 2012-13 State Budget.
Mr Barnett said yesterday while the State Government would honour its existing commitments such as the waterfront and stadium, he indicated future resource projects would not be so certain.
"We are at the bottom of the barrel, there is nothing easy to save in Western Australia any more," he said.
"It's got down to cutting services to the public and we're not prepared to run a deficit. We will not do that as a State Government.
"If we cannot provide quality health and education services, then the State Government will not be spending money on developing further new infrastructure projects."
Mr Barnett said a per capita analysis of the GST carve-up revealed WA would receive just $1200 per person, compared with $2200 in Queensland and more than $12,000 in the Northern Territory.
"It is grossly unfair and it will hold back the development of this State and of the national economy," he said.
Shadow treasurer Ben Wyatt said there was no doubt WA was not getting its fair share of the GST .
"Ultimately the greatest threat to the State's finances is Colin Barnett," he said.