Sunshine State dark as mining boom costs GST billions

Queensland will receive almost $1.2 billion less in GST payments compared to 2024/25, with top-up payments also reduced by about $1.2 billion.

Victoria will gain almost $3.9 billion in total, $3.6 billion from the GST and a further $290 million in top-up payments, due to its recent population boom and not being as reliant on mining royalties.

Commonwealth Grants Commission chair Mike Callaghan said Queensland's mining boom had also contributed to the reduction.

"Queensland has had the largest amount of coking coal," he told AAP.

"If a state has a growth in revenue, it doesn't need as much as GST distributed.

"Mining states going through a mining boom results in a reduction with their GST and because it's a fixed pool, those states that don't have any get extra."

But Queensland Treasurer David Janetzki said the state was not getting its fair share of the money.

"This recommendation would severely compromise Queensland's capacity to deliver essential services and infrastructure for our growing state," he said.

"This must be called out for what it is, shonky shifting of Queenslanders' money for a better payout for NSW and Victoria."

Mr Janetzki has called on federal Treasurer Jim Chalmers to reject the report's recommendations, saying Queensland had the biggest reduction in revenue since the GST was introduced in 2000.

NSW would gain a further $1.3 billion in total from the recommended carve-up, followed by WA with an extra $395 million and SA an extra $361 million.

The allocation of more than $4.5 billion in GST accounts for population and the economic positions of jurisdictions.

The top-up payment, also called a no-worse-off payment, was put in place after the federal government signed a deal with WA to ensure its share of GST would not fall below a certain threshold.

Other states and territories received the additional payments to make sure they were unaffected financially by the GST deal with WA.

Prime Minister Anthony Albanese committed to not changing the agreement with WA, which will receive $7.83 billion.

"We are providing increased support for WA without any of the other states being at a disadvantage because of the arrangements with WA," he told reporters in Perth on Friday.

"We have a no worse-off deal, and we have support for the WA arrangements."

Assessments for GST funding are done through a rolling three-year average, with COVID-19 lockdown years now being excluded from calculations.

Mr Callaghan said the downturn in Victoria during the pandemic had now dropped out of assessments, and the subsequent population rise meant there was a need to boost the state's GST proceeds.

"If there is a significant increase in GST need, and other states have a fall, everything in the GST is relative," he said.

The carve-up came under fiery criticism from state and territory leaders.

NSW Treasurer Daniel Mookhey said significant changes were still needed to how the funds were handed out.

"We will continue to argue for a fairer carve-up of GST on a per-capita basis, along with other measures to make the system more transparent," he said.

"We will always fight for a fairer share of funding for the people of NSW."