Last week Rudd announced that 25% of royalties from the developments would help fund WA infrastructure projects.

But Macfarlane said royalties generated by the Pluto and proposed Gorgon projects are at least a decade away and accused Rudd of making policy on the run.

Woodside has forecast first gas for the $12 billion Pluto project by the end of 2010 at the earliest.

Meanwhile, the Gorgon project has not even reached a final investment decision and there has been speculation that the project might not proceed at all because of escalating costs.

“There’s no logic to the percentage that he’s allocating, there’s no logic to the amount and there's certainly nothing in it for WA for at least a decade," Macfarlane told the ABC.

“He is attempting to create some expectation, but again his lack of understanding of economics and taxation is letting him down.

“If the proposal continues in its current form there will be no petroleum resources rent payable until 2025 – and even with optimistic prices and expansion of the proposal there will be no money for WA in this decade.”