Productivity Commission chair Danielle Wood has fired back at Western Australian Premier Roger Cook, accusing him of playing the man and not the ball.

In the latest serve in the long-running debate about state funding from the GST, Wood accused Cook of over-egging attacks on her institution.

In August, a Productivity Commission report found WA was the only state to benefit from a Scott Morrison-brokered 2018 tweak to the GST distribution model, and that the mining powerhouse was overfunded for its needs.

In response, Cook called the report “dumb”, labelled Wood’s organisation “clowns”, and took at swipe at the rest of the country, saying changes would only “prop up other lazy states”.

Wood called out the attacks in the Centre for Public Integrity’s annual oration, on Wednesday night.

“Name-calling instead of debating the evidence? Let’s leave it for the schoolyard,” she said.

“It was a message that understandably was not going to be well-liked in Western Australia. We were not at all surprised at the strong position the government took.

“But we were surprised to be labelled a bunch of ‘east coast clowns’ and ‘dodgy, deceitful and … dumb’.

“We should absolutely not let it become part of our culture.”

Wood said she was concerned about damage to institutional trust in an era of falling faith in politics and government, a main theme of her address.

She said Australians still trusted institutions such as government, police, and media, more than citizens of similar countries, and were more satisfied than counterparts with core government services.

Those levels must be protected, she argued, as pessimism takes hold from the post-pandemic economic environment.

“Public integrity matters,” she said.

“It matters for trust between citizens, institutions and governments. It matters for the ability of businesses to be dynamic and innovative.

“It matters for the capacity of governments to deliver the services people expect, and for all these reasons it matters for productivity and income growth.”

Cook’s GST bombast has split the federal Labor government, with WA-based cabinet minister Madeline King backing his comments as “fair enough” while Treasurer Jim Chalmers called them “inappropriate”.

Many independent economists, led by Saul Eslake, deride the deal as it tips billions more than previously to Australia’s most fiscally healthy state.

But Prime Minister Anthony Albanese still supports the deal.

In her speech, Wood also criticised policy-makers who propose “magic pudding” budget fixes like “addressing multinational tax avoidance, taxing billionaires more or cutting public servants”.

“In any realistic form, these raise far less money than their proponents seem to assume,” she said.

“The same magical thinking is present in discussions around new regulation.”

In a call for fiscal discipline, she said governments “shouldn’t shy away from hard conversations about the costs and benefits of different policy outcomes”.

“Our leaders need to level with us and avoid the lure of magical thinking,” she said.

-AAP