An internal Labor bunfight over the annual GST carve-up has escalated as Victoria’s Treasurer accuses NSW of being a “welfare recipient” in response to its claims the most populous state has been short-changed.

The Commonwealth Grants Commission on Tuesday announced the recommended 2024/25 GST distribution, with the national take estimated to grow to $89 billion from about $85 billion in 2023/24.

Under the distribution, NSW and Queensland’s share of the GST pool will fall because rising coal royalties have put them in stronger budgetary positions.

Victoria is due to receive nearly $3.7 billion more than in 2023/24, while NSW will receive $310 million less.

The carve-up has led to a civil war between the Labor states, with NSW Premier Chris Minns on Thursday describing Victoria as a welfare state taking “money from the pockets of NSW families”.

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Victorian Treasurer Tim Pallas returned fire on Friday, saying not a single dollar of NSW GST was headed south of the border and calling Minns “mathematically challenged”.

“He might not be the sharpest tool in the shed but he is a tool,” he said in Melbourne.

“He has totally got the GST break-up wrong.”

Referencing Minns’ “welfare state” barb, Mr Pallas suggested NSW had been an infrastructure “welfare recipient” from the Commonwealth at Victoria’s expense for decades.

“It’s just so Sydney of the Premier of NSW to scream outrage about the fact we’re coming close to getting a reasonable GST share and bemoan Melbourne’s success,” Pallas said.

“It demeans him, it belittles his state.”

But Minns has doubled down, repeatedly questioning whether the unfavourable carve-up was “planned or accidental”, and saying the entire GST system needed fixing.

“The only thing worse than Victoria taking our money is them crying about it afterwards,” he said on Friday.

Minns wants GST to be split on a per-capita basis, with additional money distributed via grants to states and territories that need further support.

Such a system would benefit the larger states, which receive less in GST per resident than they raise, but would lead to South Australia, Tasmania, the ACT and Northern Territory pocketing less.

“When the states sit down to eat, NSW can’t eat last every single time,” Minns said.

“This is public money, it’s not government money, it’s owned by the people of Australia and it should be distributed in a fair way.”

But the idea has been shot down by Pallas.

“It really just drips of entitlement and selfishness,” he said.

He also said Victoria remained committed to ceding some of its GST to poorer states.

The war of words could make for an awkward virtual meeting between state and federal treasurers on Friday.

Minns said he did not anticipate the meeting would be friendly but NSW Treasurer Daniel Mookhey had no choice but to put the best case forward as key negotiations continue over education, health and infrastructure funding deals.

Federal Labor frontbencher Jason Clare wasn’t fazed by the friendly fire, saying there was the same “argy-bargy” every year when the grants commission handed down its independent decision.

“I’m old enough to remember Bob Carr making the same argument to John Howard,” he told Seven’s Sunrise program.

Deputy Opposition Leader Sussan Ley labelled the GST fight “blokey” and urged state leaders to have constructive talks.

“This is all sounding a bit shouty and loud and I would suggest to the Labor leaders that maybe they dial down the testosterone,” she said.

Prime Minister Anthony Albanese earlier deflected when asked to rule out changing the system to redistributed GST based on population size.

“Every year there is some criticism of the process, but it’s at arm’s length from government,” he told Adelaide radio station FiveAA.

– AAP