Prime Minister Malcolm Turnbull has defended doling out almost half a billion dollars to Western Australia, saying the state gets a "raw deal" out of the GST allocation.
The federal government is providing $490 million for Western Australian infrastructure in 2016/17, to ensure the state's share of GST is effectively maintained.
It comes a day after Mr Turnbull said there would not be a "fistful of dollars" to give away in the May 3 budget.
The state believes it has been short-changed by $4 billion in the latest carve-up of GST revenue.
"Western Australia has had a very raw deal out of the GST allocation formula," Mr Turnbull told reporters in Sydney on Sunday.
"This is an issue of dealing fairly with Western Australia ... we believe this is an equitable way."
Labor frontbencher Penny Wong said she understands the concerns of Western Australians and is supportive of the payment.
"But what you always get with Mr Turnbull and the Liberal party is that they give with one hand and take with the other," Senator Wong told reporters in Perth.
She said the coalition government cut half a billion dollars set aside by Labor for public transport in WA, as well as the broader cuts to schools and hospitals across the nation.
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