The federal government says West Australians will benefit in the carve-up of GST revenue this year.

West Australians should have reason to celebrate as beneficiaries of GST revenue distribution this year, Treasurer Joe Hockey says.

Mr Hockey was responding to a question by Palmer United Party leader Clive Palmer about perceived inefficiencies in the carve-up of GST revenue to the states.

Mr Palmer, whose party hopes to gain a seat in the WA Senate election re-run next month, questioned the treasurer in parliament on why WA was not reimbursed all its GST revenue.

Mr Hockey said that in the latest redistribution still to come, following a meeting of state treasurers in a few weeks, WA will be revealed as a beneficiary of GST this year.

“WA actually does better than they were expecting,” he told parliament on Monday.

“It is a significant improvement on the state budget and West Australians should be celebrating that.”

Mr Hockey said the formula for distribution of GST funds has been in place for many decades and giving more to one state meant taking from another.

He challenged Mr Palmer to decide if he would prefer more funds for WA over his home state of Queensland.

“Would he like to reduce the GST allocation to Queensland, to improve the GST allocation to WA?” Mr Hockey asked.