The GST was launched in July 2000, with then Treasurer Peter Costello declaring it a solution to states and territories' seemingly endless battle to fund essential services like hospitals, schools, police and roads.
"Every dollar raised by (the) GST is paid to the state and territory governments," Mr Costello pledged.
"It is the money that will provide the schools, the hospitals, the police, and the roads of the future.
"From 1 July they have a revenue base that grows in line with the economy. It will provide a secure base to fund their services."
But the new analysis shows that not only was that initial pledge hundreds of billions of dollars short of the mark, the current cost of-living crisis is making things even worse.
The report calculates that if the GST had grown at the same pace as the economy - as promised – states and territories would have more than $120 billion to spend on essential services over the forward estimates.
"When it comes to the GST, states and territories have been sold a pup," said Matt Grudnoff, Senior Economist at The Australia Institute.
"The GST has failed every Australian who's had to wait for an ambulance or essential health care.
"It's failed every child who's been squashed into a double classroom because their school can't find or afford a replacement teacher.
"It's failed anyone who's suffered because a shortage of police.
"States are constantly coming to the federal government, cap in hand, begging for more funding. Just last week, Premiers were once again at each other's throats fighting for a better GST deal for their state.
"Unfortunately, it's getting worse. The cost-of-living crisis means people are spending more on the things like rents and mortgages, and don't have much left to spend on things which are subject to GST.
"This can be fixed. Sensible tax reform like introducing a tax on gas exports or scrapping the fuel tax credit scheme would raise tens of billions of dollars.
"The GST would raise significantly more revenue if it was applied to private health insurance and private school fees.
"States were promised more and deserve more. The GST is broken and there are more than a quarter of a trillion reasons to fix it as a matter of urgency."
