West Australian Premier Colin Barnett believes he is winning the argument to change the way GST revenue is divided each year.

It wouldn’t be a COAG meeting unless Colin Barnett whinged about Western Australia’s share of the GST revenue.

But the WA premier believes he’s slowly winning the argument to change the way the GST pie is carved up between the states and territories each year.

The cash-strapped resources state argues the current system penalises WA, which broadly wants to see the consumption tax proceeds distributed on a per capita basis, and points to a $428 million fall in GST proceeds in 2013/14.

Mr Barnett conceded at a Council of Australian Governments meeting in Canberra on Friday it might sound like a “whinge from the West”.

But he believes the GST, introduced in 2000 to provide revenue stability, has become the “greatest source of instability”.

“What I would emphasise today is that the system has failed,” he said before warning Queensland and NSW would be next in the firing line to lose GST funding.

“I would like to think I might have made some progress in terms of eventually winning the argument.”

Prime Minister Tony Abbott agreed the current funding system overseen by the commonwealth – under a process called horizontal fiscal equalisation – had issues.

He pointed to white papers being prepared for the federal government on the federation and the taxation system.

“I hope that at the end of the white paper process that we have a system which is more rational, more transparent and no less fair than the existing system,” Mr Abbott said.

“Maybe the current arrangement is fair, but it certainly isn’t transparent.”

NSW Premier Mike Baird has for some time supported a move to a per capita basis for the GST revenue split.

“That is something that makes a lot of sense, it gives much more stability to your budgeting and that’s really what Colin’s talking about,” Mr Baird said.

But heading into the COAG meeting this morning, Tasmanian Premier Will Hodgman was adamant the status quo must remain.

“I get a little irritated by other premiers wanting to disrupt what is an equitable system,” he said.