WA Treasurer Ben Wyatt has warned the federal government not to "crab walk" away from the Productivity Commission's report into the GST revenue distribution, but the Commonwealth insists it is not the "enemy".
The commission says in its draft report that providing Commonwealth top-ups to WA or setting a GST floor are not long-term solutions, and has instead recommended resetting the system the government calls horizontal fiscal equalisation.
Mr Wyatt said the draft report was an important first step for WA, which had its revenue share reduced to less than 30 cents in the dollar at the end of the mining boom.
"It does importantly say that the current equalisation system does go too far and is too harsh on the strongest state, and for the longest time there the strongest state was WA," he told 6PR radio on Monday.
Mr Wyatt warned against the federal government taking too long to implement changes after the final report is handed down in January.
"I don't want to hear any form of crab walking away from this report because it's something that they did, they created and they need to have the key role in any implementation," he said.
Federal Treasurer Scott Morrison says the plan has always been to implement changes before the next federal election.
"Ben's got to decide whether he wants to work with the Commonwealth government to get a solution or he just wants to play politics," he said.
"I'm not trying to get a political quick fix on this. I'm tyring to get a fair dinkum solution."
Mr Morrison said the Commonwealth was a partner in solving the problem, not the enemy, and he urged Mr Wyatt to convince other Labor states to get onboard.
Mr Wyatt later told reporters it was not up to WA to take on that leadership role.
"I can say to the other state treasurers that this GST distortion and the unfairness on WA isn't a figment of the state's imagination. It's a real thing. It has now been confirmed," he said.
Opposition Leader Mike Nahan says there will be a huge bun fight when the report is released.
WA Chamber of Commerce and Industry said the commission had backed its proposal for a "partial equalisation" model, which would have returned an additional $3.55 billion to WA last year alone.
"The current system effectively rewards economic laziness while punishing states like WA which drive development, grow their industries and create jobs," chief economist Rick Newnham said.
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