Hamilton City Mayor, Paula Southgate says she is “hugely supportive” of Local Government New Zealand’s (LGNZ) recent call to Government to return GST on rates to Councils.
The Mayor (pictured) says the current funding model for local government is “broken and unsustainable”.
“While Government is not immune to the financial challenges we face, returning GST on rates to Councils would be an absolute game-changer, allowing us to deliver essential infrastructure and services in a local way, without the burden mostly being borne by today’s ratepayer,” Mayor Southgate said.
Council finance staff estimated that GST on rates for the city amounted to $36 million in 2022/23, and $38 million in 2023/24.
Chair of Finance Committee, Maxine van Oosten said the Council needed to explore a range of funding sources, to continue to support investments in the city.
“Relying heavily on rates is unsustainable,” she said.
“This could be one of the tools to address the funding and financing challenges we are facing.”
Ms van Oosten said “returning GST revenue to the region allows us to allocate funds where they are most needed.”
When looking at the potential GST return to Hamilton for the year to June 2022, Infometrics calculated that the Council would get back more than 11.3% of its operating income, she said.
“A 2023 ‘Future for Local Government’ panel report noted that Council rates have remained around 2% of GDP for more than 100 years, indicating the pressing need for reform.”
At the Council’s Finance and Monitoring Committee on 7 May, Elected Members also highlighted the positive impact of the Government paying rates on crown land and development contributions, on Council’s financial position.
