Rotorua Daily Post
  • Rotorua Daily Post home
  • Latest news
  • Business
  • Opinion
  • Lifestyle
  • Property
  • Sport
  • Video
  • Death notices
  • Classifieds

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • On The Up
  • Business
  • Opinion
  • Lifestyle
    • All Lifestyle
    • Residential property listings
  • Property
    • All Property
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
  • Rural
  • Sport

Locations

  • Tauranga
  • Te Puke
  • Whakatāne
  • Rotorua
  • Tokoroa
  • Taupō & Tūrangi

Media

  • Video
  • Photo galleries
  • Today's Paper - E-Editions
  • Photo sales

Weather

  • Rotorua
  • Tauranga
  • Whakatāne
  • Tokoroa
  • Taupō

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Rotorua Daily Post

The Economy Hub: Do regions get a fair share of tax?

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
30 Jun, 2017 10:10 PM3 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Are the regions getting a fair share of the tax take?

Are the regions getting a fair share of the tax take?

Are the regions getting a fair share of the tax take?

New Zealand First leader Winston Peters this week proposed diverting 25 per cent of the government's royalties from water, oil and mineral extraction - and the GST paid by tourists - to the region in which they spent their money.

Peters argued that the regions were generating an large proportion of the country's wealth but weren't getting a fair share in return.

Regional economies are going strong again as commodity prices rebound and the housing boom spreads around the country, said Westpac senior economist Satish Ranchhod.

This week's Westpac-McDermott Miller regional economic confidence survey showed confidence improving while in Auckland and Canterbury it declined.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Nelson, Marlborough and the West Coast were the most optimistic regions. There was also a strong lift in confidence in the Bay of Plenty and the Gisborne and Hawke's Bay regions.

When you break it down to GDP per capita then economic activity in New Zealand was actually pretty evenly spread between rural and urban areas, Ranchhod said.

"And if you look take look at regional funding from the crown its also pretty evenly spread, once you account for population," he said.

Advertisement
Advertise with NZME.

"There is a strong argument for infrastructure spending in a areas like Auckland where the population is growing and also to infrastructure spending to support growing industries like tourism but this isn't isolated to the regions, its a nationwide problem."

It was important to define the problem and identify clearly where the infrastructure spending gaps were, said NZIER senior economist Christian Leung.

"You could argue that some local councils are facing a gap when it comes to infrastructure but to isolate that specifically for tourism is much harder."

Then there were other implementation issues like deciding on boundaries, and what gets counted as tourism spend.

"For example, airfares, a lot of tourists go through Auckland , would that mean a lot of that funding get directed to Auckland rather than the regions."

The cyclical nature of New Zealand's economy could also create issues with a regional funding model, Ranchhod said.

"At times when an economies doing well they can get a big boost from GST spending but when that economy turns down for some reason [they] can find themselves in some tough times. That's particularly true for regional economies where a lot of activity is linked to external conditions that its hard to effect with policy."

But Peters' policy idea has an unlikely champion in economic think-tank the NZ Initiative. Typically at odds with Peters on the immigration debate (NZ Initiative argues immigration generates a net economic again) the think -tank has been advocating for reform of the tax system to put more revenue directly into the hands of local government.

A delegation of Initiative members visited Switzerland last month to look at the success of its local tax funding model.

Initiative executive director Oliver Hartwich argues putting more tax revenue in the hands of local communities drives more rational economic decision making.

The Swiss model avoids many of the implementation issues that trying to isolate tourism or industry specific tax by allowing local bodies to tax directly and across the board.

Advertisement
Advertise with NZME.

Local councils would then have more responsibility for schools, hospitals and even policing.

Finance Minister Steven Joyce said this week that Peters' proposals would take between $1 to $3 billion out of the crown's accounts.

• Click here to follow and debate the Economy Hub on Facebook.

Save

    Share this article

Latest from Rotorua Daily Post

Rotorua Daily Post

Caught on tape: Identity finally revealed of Jaguar-driving teen behind CBD rampage

06 Jul 06:00 AM
Rotorua Daily Post

'He's just scared of me': Teen's Māori wards challenge to PM

06 Jul 03:55 AM
Rotorua Daily Post

'Safety risks': Concerns as hospital security guards double as cleaners

05 Jul 10:45 PM

There’s more to Hawai‘i than beaches and buffets – here’s how to see it differently

sponsored
Advertisement
Advertise with NZME.

Latest from Rotorua Daily Post

Caught on tape: Identity finally revealed of Jaguar-driving teen behind CBD rampage

Caught on tape: Identity finally revealed of Jaguar-driving teen behind CBD rampage

06 Jul 06:00 AM

Police and footpath pedestrians had to dodge the vehicle to avoid getting run over.

'He's just scared of me': Teen's Māori wards challenge to PM

'He's just scared of me': Teen's Māori wards challenge to PM

06 Jul 03:55 AM
'Safety risks': Concerns as hospital security guards double as cleaners

'Safety risks': Concerns as hospital security guards double as cleaners

05 Jul 10:45 PM
Bid for inquiry into Ōhinemutu sewage spills fails

Bid for inquiry into Ōhinemutu sewage spills fails

05 Jul 06:00 PM
From early mornings to easy living
sponsored

From early mornings to easy living

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • Rotorua Daily Post e-edition
  • Manage your print subscription
  • Manage your digital subscription
  • Subscribe to Herald Premium
  • Subscribe to the Rotorua Daily Post
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • Rotorua Daily Post
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP