Mel Brooks, creator of the TV program Get Smart and movies such as Blazing Saddles, a comedy based on a comical view of the old West, once wrote, and delivered a line that went like this: “It’s good to be the king.”

Well, after understanding the GST handout to Western Australia, the richest state in our country’s history, one has to say: “It’s good to be a Western Australian.”

By the way, this isn’t our western cousin’s fault. Instead, it was the work of the Morrison Government that delivered an inexplicably good deal on the GST to the West, which will cost the nation’s taxpayer $5.2 billion.

No one was getting smart with this dumb deal, created to save seats in WA. And the madness is set to continue with Treasurer Jim Chalmers extending the big payout to the West until the end of the decade!

In case your knowledge of how the GST ‘dough’ is divided up between the premiers of our states, there’s a fixed amount of money, which is $89 billion for this financial year.

This ‘charity’ to WA comes as the state has iron ore prices over $US100 a tonne. Under the old GST ‘carve up’ rules, the state would get less as it picks up royalties from the miners.

“But the deal with the Coalition in 2018 set a per capita relativity floor under the share of GST revenue to be returned to the state, a floor that will climb from 70 per cent to 75 per cent in 2024-25, according to the CGC’s new estimates of GST distribution for the next financial year,” The Australian reports today. “With iron ore export prices stuck above $US100 a tonne, WA would normally be expected to receive a lower portion of the federal pool of GST revenue, based on a formula in place since the introduction of the tax in 2000.”

Instead, WA will get more and NSW and Victoria (deeply in debt after the Covid experience) will actually get less because the pool of GST money is fixed!

The Oz tells us that “…NSW could be up to $10bn worse off over the next four years after the state’s share of the annual GST take was slashed, a move NSW Treasurer Daniel Mookhey slammed as ‘absurd’.”

And he makes the good point that “NSW takes most of the nation’s population growth but is being punished by having its GST cut.”

The Commonwealth Grants Commission advises Canberra on how the GST money should be divided up between the states and territories, based on need and the fiscal capacity of each state. But right now, the equation used looks crazy. I guess the Albanese Government doesn’t want to pick a fight with the West and its voters with an election looming next year.

The problem is that it isn’t easy to understand the relativity floor put in by the Coalition and not dumped by Labor now it’s in power.

The Australian says: “As a result of a deal agreed in 2018 to protect Liberal seats in WA, the commission estimated the state would receive $6.2bn more GST in 2024–25 than it would have under the original GST distribution arrangements.”

Under the old rules, as Western Australia gained from mining revenue, they’d get less GST. But not now because there’s a “no worse off guarantee”. This means a portion of Australian taxpayers’ pile of money that goes to the federal government from all sorts of taxes will have to be used to make other states not worse off, as WA pockets GST proceeds it doesn’t really need.

While it’s crazy, you could just say, “it’s politics!”

Economist Saul Eslake told The Oz that this is “scandalous” that the richest state “is given money to run even bigger surpluses”.

He thinks this will be a $40 billion rip off of taxpayers by the time the deal dies in 2030.

Right now, Labor is looking to change super rules. Considering making people with big super or valuable houses pay more for aged care. But this sounds unfair when dumb political plays have wasted $40 billion on winning seats in WA.

It looks like a comedy of Mel Brooks proportions but in reality, it’s more a Shakespearian political tragedy.