NSW Premier Chris Minns has urged the federal government to abandon the long-held principle that richer states should prop up poorer ones, pushing for a radical overhaul that would carve up the GST on a per-person basis.

The policy is a major departure from how grants have been allocated since 1978, when a conference of state premiers agreed federal funding should be distributed based on “relativities” that granted proportionately more funds to states that had less capacity to raise revenue.