A 124-page report from the Productivity Commission has launched a fresh attack on Western Australia’s GST arrangement, advising the Treasurer to overhaul and dismantle a 2018 multi-billion-dollar deal for the State.

The Canberra-based body gave a damning view on WA’s position when examining how the GST is shared — declaring that the 2018 deal introduced by Scott Morrison as a “costly mistake” which has “largely not achieved its goals” and has only benefited WA.

It claimed on 24 occasions that the top-up deal was “perverse” and has failed to work as intended.

Among the three main recommendations proposed in the review, the Commissioners say a move back back towards the pre-2018 GST distribution system is their most preferred option.

It insists that the deal, which rescued WA from a record-low GST return of just 30 cents in the dollar, has cost Australian taxpayers $23 billion, which is more than four times what was originally projected.

The east coast-centric interim report will set the scene for an interstate feud ahead of Jim Chalmers’ meeting with state and territory treasurers on Friday afternoon and before the final report is released at the end of the year.

Anthony Albanese on Friday played down the review as a standard, legislated part of the 2018 deal and gave assurances that WA would continue to receive its “fair share”.

“This interim report… is just that an interim report,” the Prime Minister said.

The 2018 deal gave state and territories a hard safety net with a guaranteed minimum 75 cent floor, before then also pegging WA’s GST share to the stronger of the two biggest economies on the east coast, New South Wales or Victoria.

It means that even if WA is absolutely swimming in mining cash, its GST rate cannot drop below the rate of NSW and Victoria.

The Productivity Commission, however, argues that WA to date is the only state which has benefited from the changes and the Federal Government’s top-up payments “aren’t working as intended” by making the system less equitable.

The report also framed WA as an over-funded outlier by insisting that the State gets 113 per cent of what it actually needs to run the state, while every other state gets only 98 per cent.

Among the three main recommendations proposed in the review, the Commissioners have suggested moving back towards the pre-2018 GST distribution system as their most preferred option.

However, rather than relying on top-up payments, the “first-best option” recommends that the Treasurer utilise their existing authority to direct the Commonwealth Grants Commission to address what it describes as costly “dominant-state effects” where they arise.

It would mean if one jurisdiction, like WA for example, completely dominated a specific revenue source like mining royalties, the Treasurer could step in and adjust the rules so that the state isn’t unfairly penalised with a massive drop in its GST funding.

The other two options include again going back to the pre-2018 GST distribution system but instead the Federal Government would be able to bypass the GST pool entirely and make direct, transparent cash payments to any state that is unfairly disadvantaged by dominant-state issues.

And the third recommendation, which is described as the least preferred “minimum change” option, proposes keeping the current system but making three critical tweaks.

These include scrapping the “standard state benchmark” which pins WA’s share to the performance of NSW or Victoria, killing the extra federal top-up cash injected into the GST pool, and making the “No Worse Off” guarantee, also known as “NoWO”, permanent.

While the Commission describes this as the “minimum change” option because it keeps the post-2018 framework mostly intact rather than dismantling it, this option would still deal a major blow to WA.

The removal of the standard state benchmark, which artificially boosts WA’s GST share by billions, would drop the state back to a flat 75-cent relativity floor and eliminate the federal pool boost.

As WA received $9.3 billion in GST payments in the current financial year, which is equivalent to 82 percent of the state’s population share, it would mean millions would be at risk of being ripped from the State annually.

The report, which discloses that it relied on AI for “editing” and “general research”, was prepared by the Productivity Commission’s senior officials Alex Robson and Angela Jackson.

The Commissioners had also decided to use a natural disaster in New South Wales as an example to illustrate why WA should receive less, insisting that a costly bushfire in the east could prompt a pay rise for WA.

“The 2018 changes tried to achieve too much,” Dr Robson said.

“And moved too far away from the system’s core objective.

“The result is a system that is now more complex, less consistent and more costly.

“If the government wants to support other objectives, they could do so outside the GST distribution system.”

The review itself has, however, raised alarm bells in the West, with WA Treasurer Rita Saffioti warning “east coast whingers” not to change the deal, arguing it could damage the State which is an economic powerhouse for the nation.

Ms Saffioti has previously claimed that if the 2018 deal was completely dismantled, it could cost the State $6 billion a year.

While the PM and Treasurer have repeatedly promised that WA’s GST share is rock solid, Labor controversial federal budget overhauls to capital gains tax and negative gearing has had many in the west spooked.

Mr Albanese had answered “absolutely” when asked in Sydney on Friday if the public can rely on him to “tell the truth”.

So worried, however, several prominent West Aussies — including Andrew Forrest, Tony Galati, Michael Chaney and John Worsfold — have all joined a new campaign by the Chamber of Commerce and Industry to protect WA’s share.

When asked if he would make fresh assurances to the concerns WA business community, the treasurer referred The West Australian to a government spokesman who also down played the report.

“This is an interim report that was commissioned by the former government. We’ve been clear that WA must always get its fair share,” the spokesman said.

Ahead of the final report being released before the legislative deadline of December 31, four public hearings will be held into the Commission’s findings from September 14 to 18.

People will also be able to provide submissions to the commission before September 30.

The Productivity Commission had already received 65 submissions and 50 comments ahead of Friday’s interim report.