Western Australia stands to lose $159 million a year as a result of the introduction of an emissions trading scheme, a new report says.
The report by Canberra-based think tank the Australia Institute suggests the Australian economy will lose up to $1.4 billion a year, with the budgets of New South Wales and Victoria hit the hardest by rises in the cost of energy, transport and wages.
NSW would lose $466 million a year, while the budgets of Victoria and Queensland would take a hit of $358 and $289 million, respectively.
South Australia would lose $99 million.while the governments of Tasmania and the ACT would be $22 million and $26 million worse off, while the Northern Territory would lose $16 million.
There needed to be a discussion about how the states and territories would be compensated under the federal government's plan, Australia Institute director Richard Denniss said.
"The problem is not that some costs will rise, but that at the moment there is no discussion of the need to compensate the state and territory governments," he said.
"Nearly one-and-a-half-billion dollars per year could employ more than 15,000 teachers or nurses," he said.
"The commonwealth has said that it will compensate households and polluters, but it looks to us as though the state governments have got a much stronger case for compensation than the big emitters," Dr Denniss said.
"Unless the commonwealth puts compensating the states ahead of compensating the polluters then those who rely most heavily on government services will miss out the most."