Wairarapa ratepayers could see as much as a 15 per cent drop in rates if local mayors have their way and the GST collected on rates is returned to the community.
Local Government NZ is urging central government to return GST collected on rates to local councils, an initiative that would generate additional funds for local councils straining to find alternatives to rates increases.
Infometrics reports the GST on all New Zealand rates was valued at about $1.1 billion in 2021/22.
Based on these values, Masterton would have been set to benefit to the tune of $5.13 million, while Carterton would have received $2.23 million, and South Wairarapa $2.96 million.
Because funding for government services is largely localised, councils are struggling to finance core infrastructure upgrades without increasing rates, Masterton Mayor Gary Caffell said.
If GST collected on rates was returned to council, Masterton ratepayers could be looking at a one-off 15 per cent drop from proposed 2024/25 rates.
Caffell said returning GST to ratepayers just makes sense.
“In general, I think councils can justify having access to some of the tax revenue the government takes from our local community. A simple way to do that is take GST off the council’s rates.”
While there are alternative options like council borrowing, these would require increases in rates, putting further pressure on the community.
South Wairarapa Mayor Martin Connelly said rate increases and interest rates are causing considerable problems for councils and ratepayers alike, and he is also in favour of using GST to fund local government services.
Carterton Mayor Ron Mark is also supportive of the call for there to be a fairer split of revenue between central and local government.
He noted that every time ratepayers use their bathrooms, walk on a local footpath, or drop their kids off at school they’re benefiting from council spending, but keeping rates increases as low as possible continues to be made difficult by central government “micromanaging” of councils.
Always rate payers being screwed 🙃 being told a load of lies by council how we the rate payer will benefit. As long as wairarapa has 3 councils costing 24 million dollars in wages alone the rate payers will never get any benefit? 15% = 10.32 million which means rate payers pay 🤔 34% of rates for 3 council wages. Have one council then rate payers will be saving 👍 dollars 💸