Western Australia would be $4.7 billion better off under the Federal Government's proposed GST fix, designed to prevent the economic shocks which saw the state's share of the tax plummet after the mining boom.
Currently, WA receives 47 cents for every dollar it sends to federal coffers, an improvement from the 34 cents received in 2017-18.
WA's share of the GST slumped in recent years because the Commonwealth Grants Commission deemed it remained "the state with the strongest fiscal capacity", well after the mining boom ended.
The state's financial position was worsened, according to the Langoulant report into the state's finances released in February, because the former Barnett government botched major projects, ignored warnings from senior officials and did not address governance and management problems, contributing to large deficits and a soaring debt bill.
The restructure of the GST distribution system has already been welcomed by WA Treasurer Ben Wyatt as meaningful reform to a system which long punished WA.
But the inequality would not be righted overnight.
It would be a three-step plan over eight years starting from 2019-20, with the Commonwealth hoping to come to a final agreement with the states by the end of the year.
So how will WA's position improve?
Under the plan, WA's share of the GST would jump from 70 cents in the dollar in 2019-20 to 83 cents in the dollar by 2026-27.
If nothing changed, the state's share would only reach 76 cents in the dollar by that time.
To improve stability in the allocation of GST funds, the Federal Government would benchmark the financing of all states to either NSW or Victoria.
It has previously been benchmarked to WA, as the strongest performing state because of the mining boom.
But the Government says benchmarking the GST distribution to the country's two largest economies would reduce volatility in the system, because they are not reliant on one particular sector like WA, which is heavily dependent on mining.
An initial boost to get WA back in the game
The first step of the plan would see WA receive special top-up payments worth $1.4 billion until 2020-2021 to help bring it up from the very low existing base.
This would also ensure WA did not receive any less than 70 cents in the dollar over the transition period.
Step two would move to the new distribution system benchmarked to NSW or Victoria, whichever is strongest.
Over six years from 2021-22 to 2026-27, WA would receive $3.303 billion more than it otherwise would.
How will they ensure WA's share doesn't slide again?
For the first time, a floor rate will be established, below which no state will be allowed to fall.
The floor of 70 cents per person per dollar of GST would be introduced for all states in 2022-23, and two years later the floor would be increased to 75 cents.
"No state's relativity is expected to fall below 0.75 after 2024-25 on current projections under the new equalisation benchmark," the Federal Government's interim response to the Productivity Commission's inquiry into the GST system stated.
WA's GST share would be projected to reach 83 cents in the dollar by 2026-27.
What about the other states?
The Government is promising all states would be better off under this new system.
To do that it would inject extra funding into the GST distribution pool from treasury coffers, which it says it would increase the size of the pool by $7.2 billion by 2028-29.
Under step three, the change to the new distribution model would be completed by 2026-27 amid ongoing boosts to the GST pool by the Commonwealth.
Mr Wyatt is already urging his federal Labor colleagues to agree to the plan.
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