Treasurer Joe Hockey has written to his state and territory counterparts accepting a Grants Commission recommendation on how the GST will be carved-up in the next year financial year.
It means Western Australia will get back less than 30 cents in every dollar paid by the state's taxpayers.
The government will be providing a package to help the state with that adjustment, but Mr Hockey told reporters on Wednesday it was vitally important that WA continue with microeconomic reforms as part of the package.
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