TASMANIA will receive its recommended $2.2 billion share of the GST next financial year, despite Western Australia's push for the revenue to be redistributed.
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WA Premier Colin Barnett failed to secure any agreement to change the distribution of the tax at a Council of Australian Governments meeting in Canberra yesterday, after the Commonwealth Grants Commission recommended his state be given less than 30¢ for every dollar it raised.
Despite indicating sympathy for Mr Barnett's position, Prime Minister Tony Abbott accepted the CGC's recommendation, meaning Tasmania will receive an expected $2.236 billion in 2015-16.
It is $132 million more than the state government had budgeted as recently as two months ago.
Mr Hodgman said the CGC process was independent and should be left untouched.
"It is about being fair," he said.
"It should be above an annual political brawl, which is the very reason the Commonwealth Grants Commission exists, to provide the fairest possible model to allocate GST funds.
"While we have won this battle, we have to keep fighting to ensure that the GST continues to be allocated fairly under the current formula."
An angry Mr Barnett said he was disappointed at the outcome of COAG.
"Western Australia feels very poorly treated under the recommendations that have been made," he said.
"I don't know how we're going to reform Australia and modernise it when we can't tackle an issue which is so inequitable and has the effect of penalising success and rewarding weakness or failure."
Mr Abbott will host a leaders' summit later this year when the issue is again expected to be thrashed out.
He said one of the items that will be up for discussion is an agreed floor for the rate of return that a state or territory could receive.