Federal government expected to hand the Productivity Commission's GST report to states on Wednesday

The state government is expected to receive a copy of the Productivity Commission’s final report on GST revenue distributions on Wednesday.

This will be a day ahead of an anticipated public announcement of the federal government’s decision on its recommendations.

At present, how much GST revenue a state gets accords with a particular state’s capacity to raise revenue and cover expenses – particularly in the costly areas of health care and education.

But speculation is mounting the government could support a recommendation that would calculate distributions based on the revenue-raising capacity and service expenses of the average state.

State Treasury through modelling has stated this scenario would cost $168 million over a single year, or $639 million over the budget forward estimates.

Labor leader Rebecca White in Parliament on Tuesday said this cut was the equivalent of the staffing costs of 1200 paramedics, 1400 firefighters, 1400 nurses, 1600 police constables, and almost 1600 teachers.

She said the government last year in a submission to the Commonwealth Grants Commission had opposed the prospect of  top-up payments as compensation for a loss in GST recipients, arguing supplementary funding would reduce budget flexibility.

Ms White asked Premier Will Hodgman if he had abandoned this view, which he rejected.

“I will not, nor will this government, accept any reduction in Tasmania's receipts of the GST,” Mr Hodgman said.

“I will not accept anything that disadvantages our state or reduces our share of the GST.

“I have been, if not in daily contact, in almost constant contact with the Prime Minister and the federal Treasurer, as has my colleague, Peter Gutwein, our Treasurer, to continue to fight hard for Tasmania's fair share.”

Federal cabinet minister Simon Birmingham on a visit to Burnie on Tuesday said the government's response to the Productivity Commission's recommendations would be fair for all states.

"Whatever happens, we will look after states like Tasmania as the Prime Minister has given a firm commitment to do so," he said.

GST receipts account for almost 40 per cent of the state budget’s revenue.

The state is set to receive a $2.48 billion GST payment in 2018-19; a share of 3.7 per cent of the national pool of funds.