Treasurer Jim Chalmers has stared down a NSW threat to hold out on key joint funding agreements in protest over the GST carve-up, arguing that all governments are feeling financial pain from global instability and persistent inflation pushing down revenues.

As NSW ramps up its fight to reform the GST allocation process, NSW Treasurer Daniel Mookhey made a fiery speech on Monday where he argued that an inequitable GST allocation would likely cost the state its remaining two AAA credit ratings and had delivered a bigger blow to the state’s coffers than COVID-19.