Western Australia's collapsing GST allocation is the most severe economic shock the state has faced since the share crash of the late 1980s, Premier Colin Barnett says.

"This is serious stuff," Mr Barnett told Radio 6PR on the eve of the COAG meeting in Canberra.

Some states say the Barnett government has been spending money like 'drunken sailors'. Credit:Aaron Bunch

Mr Barnett said he would not accept less than the state's current share of 37.6 cents in the dollar and WA was going to start being more "selfish".

"We are the one state that's offering to fund the rest of Australia but we're saying there is a limit to it," he said.