Ex-WA senator Mathias Cormann says the "core architecture" of 2018 changes to the GST carve-up should stay in place. (ABC News: Andrew O'Connor)
Former WA senator Mathias Cormann has defended the current GST system, saying it is "working exactly as intended".
His comments come after an interim report by the Productivity Commission recommended the WA GST deal be scrapped as it was costly and unfair.
Mr Cormann says Australia has one of the most comprehensive systems of horizontal fiscal equalisation in the world and an "appropriate balance" is needed.
One of the architects of the Morrison government GST deal that for years has seen state premiers bait each other with insults over their slice of the fiscal pie says the deal was "working exactly as intended".
Former Western Australian senator Mathias Cormann's comments were the latest in attacks launched by WA's political leaders against the Productivity Commission, which on Friday issued an interim report that described the 2018 deal as a costly mistake and recommended it be scrapped.
Premier Roger Cook has called the report's authors "east-coast clowns" and said he had assurances from Prime Minister Anthony Albanese that the current arrangements would remain.
Meanwhile, South Australian Labor premier Peter Malinauskas described it today as a "dud deal" for the rest of the country that needed to be scrapped.
Mr Cormann, who was a WA senator between 2007 and 2020, was federal finance minister in the government of Scott Morrison that approved the deal.
He said "the unbelievable unfairness that Western Australia was on the receiving end of [was] addressed" by his government's changes.
Those changes included adding a "relativity floor" that righted a wrong that had seen WA taken advantage of for its mining industry, he told 102.5 ABC Perth.
"That is why our federal budget is so sensitive to movements in iron ore prices, up or down. Because it has such a massive impact on the revenue of the Commonwealth."
Source: Australian Taxation Office and Commonwealth Grants Commission.
The 2018 GST deal ensures WA gets a bigger slice of GST revenue every year than it would under the national formula.
That original formula was meant to give states the ability to offer a similar level of services by giving more money per person to states with higher needs or lower financial means.