The NSW treasurer has vowed to use an upcoming meeting of state and federal counterparts to push for reform of an "absurd" GST carve-up system that has left its budget $1.65 billion worse off.
The annual allocation of the $89 billion GST pool, released by the Commonwealth Grants Commission on Tuesday, shows NSW will suffer the largest single-year cut to its share since the tax was introduced.
NSW Treasurer Daniel Mookhey said the unexpected hit would make delivering a forecast budget surplus a miracle, claiming the nation's most populous state was being robbed of money so others could be bailed out.
He appeared visibly perturbed on Wednesday and vowed NSW would be "the last state standing" when it came to advocating for more health and education funding from the Commonwealth in light of the shortfall.
Mr Mookhey said he would go to a meeting with federal Treasurer Jim Chalmers and state and territory equivalents on Friday to call for a wholesale overhaul of the GST-sharing system.
"An absurd system like this cannot last and it's in the interest of the entire federation that we have reform," he said.
Premier Chris Minns went a step further, questioning whether the changes to the GST carve-up were "planned or accidental".
"NSW gets less by $1.6 billion and Victoria gets more by $2.5 billion and no one with a straight face can explain to anybody how they came to that final calculation," he told parliament.
"We deserve our fair share of resources from the federal government and we won't rest until we receive it."
Mr Minns described the commission's decision as "a terrible set of circumstances for Australia's largest state by any objective measure".
"When you look at the share of infrastructure spent which has been cut as well .... we just can't get hammered everywhere you look," he told reporters.
The premier said he would chase every avenue for extra funding from the Commonwealth, including deals on education, health and infrastructure spending.
"You can't say no to every single area of commonwealth expenditure to Australia's largest state and expect us to cope with service delivery, housing for young people and the pressures of inflation."
NSW shadow treasurer Damien Tudehope said the carve-up meant his state would be "funding the bankrupt state of Victoria" and the "profligate state of Western Australia".
Victoria and Western Australia both came out on top of the revised allocation, with Victoria to receive a $3.7 billion increase in its GST distribution and Western Australia's share to increase by $6.2 billion.
Federal shadow treasurer Angus Taylor, whose seat covers a swathe of regional NSW, accused Mr Mookhey of "carrying on about this like a pork chop".
"He just can't balance his budget," he told Sky News.
"Do your work. Sort it out. Stop complaining and blaming everyone else."
