The Tasmanian Government has lodged its latest submission to the Commonwealth's GST Distribution Review Panel supporting the current GST distribution system.

The Minister for Finance, Scott Bacon, said the approach that has been in place since Federation ensures all States have the same capacity to provide equal services and infrastructure.

"The Tasmanian Government has been reassured by the Panel's interim findings which indicate that overall the current system is performing appropriately," Mr Bacon said.

 "There has been no compelling case put forward that there should be any significant change, other than the greed of the larger States."

Mr Bacon said the Tasmanian submission acknowledged there is room for improvement in the way the GST system works, but suggests any changes can be made by the Commonwealth Grants Commission.

"All Tasmanians should be concerned at the Liberal push for radical change to this system," he said.

"Liberal Shadow Treasurer Joe Hockey has now joined Tony Abbott in supporting Western Australia's plan to take funding away from the smaller states such as Tasmania.

"The Liberal proposal would rip up to $700 million out of Tasmania's Budget every year.

"It seems every senior Liberal leader in the country now shares this view.

"Will Hodgman has failed to persuade his Liberal colleagues to drop this appalling idea. The Liberal party are pushing ahead with a plan that would devastate Tasmania.

"Tasmania's finances have been hit hard by the Global Financial Crisis and with limited capacity to raise our own revenues, it is imperative that the GST distribution method is not changed in a way that would limit our ability to provide core services.

"The fair distribution of the nation's wealth is one of the core values that underpins Federation and it must be preserved.

"The current system is reviewed by the Commonwealth Grants Commission every five years and all States and Territories have an opportunity to feed into that process and put their cases for improvement."

Tasmania's submission to the GST Distribution Review is available on the Treasury website at http://www.treasury.tas.gov.au/