Feds accept GST recommendation despite state pressure

Senator Murray Watt says the GST carve-up was made at arm's length from the federal government. (Joel Carrett/AAP PHOTOS)

An independent body's recommended carve-up of GST allocations is fair, the federal government says, and it will not seek to overrule the decision.

NSW and Queensland will be under pressure to cut services or raise taxes thanks to the new GST carve-up but there is no expectation of a broader hit to the national economy.