Australia's Prime Minister Malcolm Turnbull made the GST concession in Perth on Saturday. Credit:AP/Rick Rycroft Under the formula used now, there is a lag of about three years before changes in a state's financial situation results in compensatory changes to its proportion of the national consumption tax. The WA economy is experiencing a sharp downturn as the end of the mining boom bites into the state's finances. Under the federal plan, a minimum percentage floor of GST revenue would be gradually introduced, increasing WA's share to make up for lower iron ore prices cutting the amount the state collects in mining royalties. A gradual phase-in would mean no other state would be disadvantaged because they wouldn't lose compared to the projected GST share over that time, Senator Cormann told Sky News on Sunday.

Colin Barnett says he will seek more information about a national redress scheme from the federal government. Credit:Philip Gostelow He didn't nominate what the floor would be, but noted past Council of Australian Governments meetings had floated a base of at least 50 per cent. WA premier Colin Barnett hoped the percentage floor for the state would end up at about 75 cents from every dollar raised. Mr Barnett was, unsurprisingly, delighted with the announcement, telling reporters at the party conference it would provide long-term security and stability in revenue and allow WA to plan for health, education, roads and other spending. But other state leaders were far less impressed with a situation that could potentially reduce the amount of GST currently allocated.

Victorian Treasurer Tim Pallas said Victorians would lose out from what he described as a "craven" exercise for votes by the federal government. "Victorians will once again be collateral damage as Malcolm Turnbull short-changes our state, and cravenly pursues votes at the WA election," Mr Pallas said. "The PM wants to manipulate the CGC processes to prop up an incompetent L/NP WA Government, while doing nothing to improve that state's economic management." Victoria is the only State to have subsidised the rest of the nation for every year since Federation. Federal shadow treasurer Chris Bowen dismissed the plan as a prime-ministerial thought bubble.

"He's got no credibility on federalism and tax, and now he says he's got an idea to change the GST distribution where no one loses and everyone wins," he said. Liberal senator Linda Reynolds said such a change would be "unequivocally good news" for all states - not just her home of WA - and particularly for NSW, which faces a drop in GST share in coming years. But Labor premiers from Queensland and South Australia were sceptical. Sunshine state leader Annastacia Palaszczuk said the plan appeared to be aimed at boosting revenue for WA ahead of the next state election - in which Mr Barnett's coalition government is struggling to retain power - and was "absolutely discriminatory". SA Premier Jay Weatherill said numerous studies had showed the existing formula was the fairest and most efficient.

ACT Chief Minister Andrew Barr said the Territory's capacity to raise revenue in comparison to other states was limited by the fact its major employer, the federal government, did not pay payroll tax. "It is a fundamental principle of the federation that Canberrans are compensated for this through the distribution of GST and another policy thought bubble mustn't change this," he said. "Canberrans are Australians too, but they are consistently short-changed by the Liberals – they've sacked thousands of Canberrans, but we've received none of the assistance other jurisdictions get when a major employer lays people off." Tasmania's Labor opposition was fuming, arguing Western Australia shouldn't be demanding more money from Canberra simply because it wasted billions of dollars during the mining boom. "Malcolm Turnbull is planning to give more to WA and that means Tasmania will be the loser," opposition leader Bryan Green said in a statement, adding his state could lose "tens of millions of GST dollars".

NSW Premier Mike Baird had a more muted reaction, saying he would wait to see full details of the plan ahead of expected talks at the next COAG meeting. AAP with Richard Willingham, Natasha Boddy