Victorian Treasurer Michael O’Brien has likened GST distribution arrangements to a Ponzi scheme.

Victoria should get a bigger slice of the GST because the current arrangements are unfair, unsustainable and like a Ponzi scheme, the state treasurer says.

Michael O’Brien says Victoria is not being treated fairly under the current formula.

From July 1 this year Victoria will receive 88 cents for every dollar raised in GST compared with 98 cents for NSW and $1.08 for Queensland, the treasurer said.

“It sounds like a Ponzi scheme doesn’t it? Spend a dollar get $1.08 back,” he told a post-state budget function on Wednesday.

“As far as we’re concerned it is a Ponzi scheme because our money goes in and never comes out again.”

Mr O’Brien said the arrangements were unsustainable and there was a strong case to be made for equity in distribution.

“If we simply got back the GST that Victorians pay, our budget would be better by $1.5 billion a year,” Mr O’Brien said.

“Imagine what further things we could do with infrastructure, imagine what we could do with tax relief, cost of living relief.”