Phil Goff's $239 million cash grab for GST paid by Auckland ratepayers

Auckland Mayor Phil Goff wants the GST that is paid on Auckland rates returned to his council to spend on infrastructure. Photo / Nick Reed

Auckland Mayor Phil Goff wants to get his hands on the $239 million of GST paid on Super City rates each year.

The Government collects 15 per cent in GST - goods and services tax - on all goods and services, including on the rates paid by property owners to councils around the country.

Goff made his pitch for the cash on TVNZ's Q + A show today.

He told the Herald, "One of the real problems when [the Government] created the Super City was they created a city that covers 36 per cent of the country's population but didn't give it an adequate revenue basis to meet the infrastructure and cost demands Auckland City is facing."

That needed to be fixed because without more revenue, the council couldn't borrow more money needed for transport, water, wastewater and other infrastructure to cope with 50,000 extra residents a year.

Goff said the Auckland Super City's role and population size made it comparable to a state government in Australia.

He said the Australian states received a proportion of the GST charged by the Australian federal government and also raised some of their own revenue from stamp duty and payroll tax.

Goff had raised with Local Government NZ the idea of councils being given the GST paid on their rates and there was "widespread interest", although pursuing the idea had not been adopted as policy.

He acknowledged, however, that getting the Government to agree to the idea would be difficult.

"It will require incredible persuasion for Government to agree to that because they would be forgoing revenue that would come directly to local government."

But he indicated the fact the Government's books were in surplus offered the best opportunity for making progress.

A spokeswoman for Finance Minister Steven Joyce said of Goff's bid, "It's not something we've been looking at at all but given we're in the caretaker mode it wouldn't be appropriate to comment any further."

Goff may find a useful ally in pushing to devolve some GST to councils - depending on which party leads the next Government - in new National MP Lawrence Yule.

Local Government NZ last year said it supported Tourism Industry Aotearoa's call for the Government to release more GST collected from tourism growth to the regions. The tourism body referred to the massive tax windfall the Government had received from the tourism boom.

Yule, in his role as president of Local Government NZ, said providing tourism infrastructure so New Zealand regions could meet visitor expectations was a big issue facing some councils.

Funding the necessary infrastructure, such as toilets and carparks for freedom campers, was challenging, especially for smaller communities with a limited ratepayer base.

Local Government NZ had long advocated a review of funding mechanisms for tourism. The Government's creation of the Regional Mid-sized Tourism Facilities Grant Fund last year was welcome, but more substantial, sustainable and long-term funding was needed to support tourism infrastructure.

"Currently the Government is reaping all the rewards of a booming tourism sector through GST from tourist spending. Some local economies benefit too, but the direct costs associated with tourism can overshadow the gains," Yule said.

"We need to make sure tourism is a well-managed and resourced industry and that local communities are not disproportionately burdened with the cost of maintaining infrastructure and dealing with huge influxes of people."