WA received $1.16 billion under the 10-year National Partnerships Agreement on Remote Housing, which expired in July, and was then offered $60 million over three years.
The state government complained loudly, launching a $245,000 advertising campaign accusing the Commonwealth of walking away from the state's most vulnerable people.
That's when relations between Federal Indigenous Affairs Minister Nigel Scullion and WA Housing Minister Peter Tinley turned ugly.
Senator Scullion claims Mr Tinley initially agreed to the $60 million deal then reneged.
"Is this bloke really so incompetent that he had forgotten that we have been engaged in negotiations since December last year and it is because he reneged on our agreement that we are yet to resolve this issue?
"If so, it is high time he reconsider his position as housing minister," Senator Scullion said recently.
He's even slung the word "racist" at Mr Tinley and WA Aboriginal Affairs Minister Ben Wyatt, who is also Australia's first Indigenous treasurer, accusing them of playing petty politics with people's lives.
Mr Tinley said he was disappointed by the personal attack.
"Descending to petty name-calling does not reflect well on Senator Scullion," he said earlier this week.
"His 'racist' comment is particularly offensive.
"I can hardly be 'racist' if I am calling for help for some of the most vulnerable people in the nation."
Senator Scullion has adopted the recommendation in last year's Remote Housing Review that the costs should be shared equally between the Commonwealth and jurisdictions, and he refuses to match the $91 million allocated by WA this financial year and $81 million in 2019-20.
That's because it's largely for services and his office insists it must be for new housing and refurbishments.
Asked about that on Wednesday, Premier Mark McGowan only replied Senator Scullion's commentary was "erratic and shocking".
"If there was anyone who should have been dropped from federal Cabinet, it was Senator Scullion," he said.
"He's a national disgrace and his behaviour on remote housing is appalling."
Labor Leader Bill Shorten also weighed in to the feud while taking a swipe at new special envoy for Indigenous affairs Tony Abbott, saying he should convince Prime Minister Scott Morrison to stump up more cash.
"If they want a reset on treating First Australians with some degree of decency, Mr Abbott and Mr Morrison should reverse their cuts to remote housing," Mr Shorten said.
Mr Tinley says he will write to Mr Morrison asking him to intervene, while Senator Scullion has urged the WA government "to put forward a fair dinkum offer that the Commonwealth can consider and hopefully match dollar for dollar if we find it acceptable".
Victoria, NSW and Tasmania opted out of a new agreement, leaving the federal government negotiating with WA, South Australia and Queensland.