An “angry” Roger Cook has torn into the interim Productivity Commission report that excoriated the Morrison government-era GST deal which boosted WA’s coffers but incensed eastern states governments.

The interim report, released on Friday, labelled the 2018 deal a “mistake” that could end up costing Australian taxpayers up to $12 billion a year and is failing its key objectives.

It also claims the current system “reduces equity” in the GST distribution and overwhelmingly benefited WA, even creating a system where a disaster in New South Wales would lead to a windfall in the west.

But at a press conference on Friday, Cook and Treasurer Rita Saffioti were having none of it, insisting the “appalling” report failed to consider WA made to the federal bottom line.

“It completely ignores the role we have in the national economy and also the national budget,” Saffioti said.

Cook said the changes proposed in the interim report would “rip up to $6 billion out of the Western Australian economy”.

“That’s the funding we use to pay our teachers, our police officers, our nurses, and deliver a record hospital build and improve our schools,” he said.

“The changes would punish Western Australia for its success, simply to prop up other lazy states.

“Western Australians are angry, and we have a right to be.

“These proposed changes are dodgy, deceitful, and quite frankly dumb.

“Our message to the eastern states is clear: the only change we will accept is no change.”

Saffioti took particular umbrage with one page of the report detailing how WA was the only state that was “substantially better off” under the 2018 reforms, claiming the state government’s submission to the inquiry was ignored.

She described it as a “complete lack of acknowledgement of our role in supporting the national economy”.

“Every other state gets a look in, and they don’t even reference us,” she said.

“Now remember, this is a Productivity Commission that’s meant to be focused on economic growth and productivity, and they don’t actually talk about it in this document.

“In fact, they dispute WA’s role, and our role in supporting the national economy.”

Saffioti and Cook argued the vast majority of WA’s iron ore royalties were automatically redistributed – in contrast to Queensland’s coal royalties – and that while for every $1 increase in the iron ore price the no-worse-off guarantee cost the federal government $95 million, it received between three and four times that in company tax revenue.

“So even with the no-worse-off guarantee, the federal bottom line still benefits from an increased iron ore price,” Saffioti said.

The interim report offers three possible changes, including a return to the pre-2018 system, with options for the federal government to make direct grants to WA.

Prime Minister Anthony Albanese, speaking before the report was released, was adamant West Australians would get a “fair deal” under the system.

“I assure Western Australians of this – you will get your fair share because your work and what you contribute to the national economy really counts,” he said.

But on Friday afternoon, Cook and Saffioti were clear: the report was a “complete backflip” on the conclusion the commission came to in 2018, and any change would penalise WA for its economic activity.

Cook said the current arrangements incentivised WA to be the “engine room of the national economy”.

“Don’t forget, iron ore and gas doesn’t leap onto a ship; you have to have the necessary transport infrastructure,” he said.

“You have to have the policy framework. You have to have the ports, you have to have the roads, you have to have the rail, and that is all an important part of ensuring we keep the national economy marching forwards.”

Saffioti addressed the example of a natural disaster in NSW boosting WA’s distribution, pointing out that gambling revenue was left untouched in the report.

“They give a situation of how a flooding disaster in New South Wales affects distribution, and they do two pages on that, but they don’t actually address the fact that there’s $6 billion of gambling revenue which is not affected,” she said.

“So a state and territory can go and triple the amount of pokies revenue, and that’s not touched, but we support a new resource project, and we provide the approvals, the land tenure, the port capacity, the roads, the rail infrastructure.

“We do all that to facilitate a new mine, and 90 per cent of that royalty revenue is redistributed.

“It’s simply illogical. It doesn’t support economic growth.”

The commission will hold more hearings before delivering a final report by the end of the year.

with Shane Wright