A tax policy pitting state against state is being reviewed to ensure value for money.

The carve-up of revenue from the goods and services tax has been a sticking point between states ever since the Morrison government gave Western Australia a special deal in 2018.

The mining powerhouse gets much more GST income than it would under other ways of dividing the money. Other states claim the arrangement is unfair and now the federal Productivity Commission has been brought in.

Treasurer Jim Chalmers said the commission's inquiry will look at whether the current policy is good value.

"This work will ensure we have the best possible system to pay for the schools, hospitals and essential services Australians need and deserve," he said in a statement.

The commission has been asked to investiga

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