For several years Western Australia and to a lesser extent other big states have criticised the bias towards Tasmania, because it looked as though Canberra was rewarding laziness.

We weren't raising as much taxation as we should, and the Grants Commission's methodology was always skewered in Tasmania's favour.

Tasmania's share of GST will climb to $1.82 for every dollar distributed, while WA's share will drop to 29 cents in the dollar.

In recent years there appeared to be sympathy for the West's argument in both Coalition and Labor quarters and Prime Minister Tony Abbott looked set to change the funding formula.

In the end he gave the West an extra $500 million out of the Commonwealth's own pocket, instead of redirecting some of Tasmania's share.

As a result Tasmania's special case has been preserved. We will continue to get more than we should, to the tune of about $800 million extra each year. The Budget forward estimates show that our share of federal GST funding and other specific purpose grants will grow by more than 20 per cent between now and 2019.

This is a great outcome for the Hodgman government, as long as they don't waste it on unproductive policies in the May 28 Budget.

Tasmania misses out on huge funding streams like defence spending, which most other states, including WA, enjoy. As well we don't share in other federal activity, apart from the CSIRO and Antarctic Division in Hobart and Kingston. Federal agencies are big employers, and we see little of it.

The settlement of the federal funding issue is hardly the panacea for all our ills. There's still plenty left for the state to confront, but it does settle a huge distraction. Tasmania's fragile economy simply could not cope with a loss of almost $1 billion a year in public funding.