WA Treasurer 'relaxed' over GST penalties

West Australian Treasurer Ben Wyatt has dismissed concerns the federal government will hold the state's GST share to ransom over the decision to ban fracking in the state's South West region.

Federal Treasurer Scott Morrison last month warned states and territories that failure to develop their gas resources would see them penalised in the GST carve-up.

But Mr Wyatt told reporters on Monday he was "relaxed about the federal government's position in respect of some of the states reluctance to exploit their resources".

A Productivity Commission review of GST distribution is examining if state policies are preventing energy resource development, with a report to the government due by the end of January.

WA currently receives 34 cents in every GST dollar while most other states get in the range of 89 cents to 181 cents.