COLIN Barnett says WA has "hit the bottom of the barrel" and will be unable to fund major infrastructure projects in the future because of the federal government's proposed GST carve-up.
WA's current share of 7.5 per cent of the GST will be cut to 5.8 per cent in the next financial year, which Mr Barnett said will give the state just $1219 per head of population.
He said the "disgraceful" carve-up would force the government to defer or cancel major projects.
"The state does not have the capacity to do the next round of major projects that might come on the horizon," he told 720 ABC Radio this morning.
"We will continue to complete projects we've committed too, but I can't offer the next round if this GST issue is not fixed."
"We have hit the bottom of the barrel, there is no money left."
The government is currently finalising the coming state budget and Mr Barnett said he and Treasurer Christian Porter were having to cut worthy programs in education, community services and health.
The Commonwealth Grants Commission's annual report on the GST carve-up for the 2012-2013 financial year - released in February - revealed WA's share of the revenue would be cut by $598 million.
Meanwhile Australia's other major resources state Queensland would see a 2 per cent increase in its share, bringing it to 20.1 per cent, under the CGC's proposal.
Under the current distribution, for every $1 in GST paid by Western Australians, 72 cents is given back to the state. Following the recommendations WA would only see about 55 cents on the dollar.