The WA Nationals have joined Australia's biggest miners in calling for a quarter of mining royalties to be quarantined from the GST, despite likening BHP's efforts on tax reform to a "wet lettuce leaf".

Their agreement on the GST issue follows their fight over the Nationals' push for a substantial tax increase on BHP and Rio Tinto — which the mining lobby criticised as benefiting other states through GST distribution.

The Productivity Commission is reviewing whether the system of horizontal fiscal equalisation used to allocate GST revenue so all states can provide an equal level of services is benefiting the economy.

Both sides of WA politics want an overhaul of the distribution system which currently gives the state 34.5 cents for every dollar of GST it collects.

In their submission, the WA Nationals echoed BHP and the Minerals Council of Australia in suggesting a quarter of WA's mining royalties be exempt from the GST formula.

"At present, any increase in royalty income is offset by a reduction in GST revenue," the submission said.

"This situation therefore recommends quarantining a portion of mining royalty in recognition of the direct mining related expenses that are attributable to the industry."

The Nationals have continued to stand by their push to increase a 25 cent per tonne iron ore tax on BHP and Rio to $5 per tonne, to help fix the state's budget.

That's despite the mining lobby's multi-million-dollar campaign against the policy during the March state election, which saw former Nationals leader Brendon Grylls lose his seat of Pilbara.

Call for 'dollar for dollar' campaign

Commenting on BHP's submission to the Productivity Commission, Nationals MP Terry Redman said if the company really wanted GST reform it could do a lot more.

"[The submission] is a wet lettuce leaf compared to the campaign that was run against the Nationals in the last election," Mr Redman said.

Nationals Leader Mia Davies said on Friday, BHP and Rio Tinto needed to put the same effort into changing the GST as they did in opposing her party's proposal.

"The Nationals today call on BHP and Rio to wield the same clout — dollar for dollar — to lobby the Federal Government to ensure Western Australia gets a better GST deal," Ms Davies said.

"Anything less would be a slap in the face to their landlords — all 2.5 million of us."

The WA Nationals also want a GST distribution that involves a mix of per capita allocation and the current system of equalisation, similar to that suggested by the McGowan Government and the Liberal opposition.

"This would better reflect actual circumstances and deliver a balanced GST share," the submission said.

It has also called for the three year lag in assessing a state's GST share to be removed, and replaced with a real time annual assessment to avoid further "perverse and unintended consequences" experienced by WA, where the economy has slumped but its GST share remains low.