The Prime Minister will host state and territory leaders for the final national cabinet meeting of the year in a bid to nut out a plan to ease the NDIS’ burden on the federal purse strings.

Leaders agreed to cut the scheme’s growth rate back to 8 per cent back in April but are now threatening to thwart the plan should an extension of the $5bn-a-year GST top-up payment not be agreed to.

States and territories have also threatened to hike taxes, which they would lay blame for on the Commonwealth.

The GST “no-worse-off guarantee” was set up after the then-Coalition government changed the carve-up in 2018 to placate Western Australia.

It enshrined a floor of 70 cents per dollar of GST in 2021-22 that will rise to 75 cents per dollar in 2024-25.

But any state that received less money than it otherwise would have under the pre-existing formula was given a top-up as part of the transition.

Ahead of the meeting, SA Premier Peter Malinauskas said the top up was “critical” to almost every state government bar one — Western Australia.

“We do need to address it because without it being fixed, at least in the short term, ahead of a long term solution, then there will be severe consequences for critical service delivery,” he said.

WA Premier Roger Cook was eager to remind other state leaders of why the deal was struck in 2018 in the first place.

“I don’t want to accuse them of being crybabies, but I would just want to point out that Western Australia is doing its fair share of lifting the Australian economy through our great resources industries, and we were surrendering 30 per cent of our GST to the other states,” he said.

Victorian Premier Jacinta Allan said she was looking forward to a very productive meeting.

Treasurer Jim Chalmers has previously said a deal would be done but not “at any cost”.

“I recognise that every government at every level has got difficult choices to make – on health, on the NDIS, the way we think about the GST arrangements and other areas,” he told reporters on Tuesday.

“Our instincts and our inclination is to always work with the states and territories where that’s possible, where that’s responsible, and where that’s affordable, and where we can advance our common interests.”

A review of the GST formula will be undertaken by the Productivity Commission at the end of 2026.

But the federal government was warned last week the states would only come to the table on upping their contribution if any state that received less money than it otherwise would have under the pre-existing formula was given a top-up as part of the transition.

A review of the GST formula will be undertaken by the Productivity Commission at the end of 2026.