Opposition leader Bill Shorten has come up with a $300 million short-term solution to Western Australia's financial woes, and urges the prime minister to end a "cage fight" between the states over the GST carve-up.
Mr Shorten said the federal government should show leadership and give WA a one-off payment, rather than Prime Minister Tony Abbott washing his hands of the GST stoush when he meets state premiers in Canberra on Friday.
Mr Abbott has repeatedly said the issue needed to be sorted out by the states and territories.
Mr Shorten said the prime minister had "thrown in the towel" and was sponsoring "some sort of State of Origin bun fight".
"Labor has a view that leadership is required not surrender, not just simply saying the problem is too hard," he told reporters in Perth on Thursday.
"The solution to the short-term problems that Western Australia faces ... doesn't involve walking away and just inciting a cage fight between various state governments.
"I believe that the commonwealth government has a role as the steward of the national financial system to provide the step-in and support."
He said the sharp fall in the iron ore price had been compounded by "lamentable" economic management by the WA Liberal government, which had piled on debt.
And there was no doubt there was unfairness in the current GST distribution system, Mr Shorten said.
"If tomorrow Tony Abbott and his colleagues can come up with a proposition which recognises that Western Australia is caught in this (post-boom) transition trap, then we'll be happy," he said.
Labor Member for Perth Alannah MacTiernan said WA had contributed a lot to the country over the past 10 to 15 years "and now it's our time for a bit of consideration".
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