NSW Treasurer Dominic Perrottet says the state has been "significantly penalised" amid further arguments towards a move to a per capita system of GST funding.
The NSW government posted a massive $4.5 billion budget surplus last week, splashing out on infrastructure, health and education but as the economic powerhouse of the nation, NSW is set to receive a smaller slice of the GST pie and foot the bill for other states.
While Mr Perrottet acknowledged on Sunday that smaller states such as Tasmania needed greater support, he said it means NSW will miss out on $14 billion over the next four years in investment.
"If we are at 32 per cent, which is what our basis would be on a per capita position, the people of NSW would be $14 billion better off," Mr Perrottet told Sky's Sunday Agenda.
"So we are being significantly penalised by the lack of incentives involved in the GST formulation."
The treasurer has previously argued for a movement towards a per capita system instead of the present model which seeks to ensure all states have a similar capacity to deliver social services.
On Sunday he urged the federal government to do more to encourage state reform.
"I support that in principle I think we need to have greater support of the other states but I think we are too far the other way at the moment and there are not enough incentives for the other states to reform," Mr Perrottet said.
"That's money that we can invest in the schools, the hospitals, roads and rail that the people of the state need."
"Other states aren't in that position they are just struggling day in and day out to make ends meet, we are building for the next generation."
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