Viewpoint – Wanted: Our GST

We’re acutely aware of how much property rates we pay as we get a regular bill. One positive thing about this is we’re focused on what’s done with our rates. On the other hand, last time you bought a coffee or went to the supermarket did you glance at the GST on the receipt? Unlikely. In 2019, the government collected a staggering $19 billion in GST, that figure was only eclipsed by PAYE at $33 billion. Perhaps we should ask what our GST is being spent on?

Auckland Council’s Emergency Budget has shown that property rates make up 37 per cent of the Council’s revenue with the balance coming from user-pays charges, development contributions and dividends from Ports of Auckland and Auckland International Airport. As this non-rates income crashed, a gaping hole appeared in Council’s budget.

Rodney is the second-fastest growing area in Auckland. House building from Riverhead to Warkworth has highlighted the lack of infrastructure. But infrastructure should be in lock-step with growth, not at some unspecified time in the future. The lack of funding for population-driven infrastructure could not have come at a worse time.

History shows government is reluctant to fund Auckland’s infrastructure unless voters are going apoplectic. The previous government conducted the political equivalent of the dance of the seven veils before finally contributing to the Central Rail Link. This government hyped light rail but that’s mired in MMP politics, stranded somewhere in the traffic jam on the North-Western motorway. To add insult to injury, when projects like the Puhoi to Warkworth motorway are finally built Aucklanders are seen as an easy touch for revenue gathering in the form of tolls.

Meanwhile, governments have unleashed immigration on Auckland creating economic growth and healthy GST revenues. The government also enjoys access to higher levels of borrowing than council and a wider ability to increase revenues. They have passed on responsibility for convoluted RMA and building code regulatory and social functions to the Council, neatly sidestepping the deep frustration all this red tape causes, while avoiding the costs Council has to recoup. It’s not surprising Council operating costs have increased. Every time Government creates some new regulation, it is frequently Councils who are left having to implement them.

It’s time to move away from property rates as a way of funding the huge list of growth-related projects we need to keep the city moving. There are $6 billion of unfunded projects in Auckland’s Regional Land Transport Plan. The government should put in place a mechanism to return a portion of our GST to Auckland Transport, specifically for growth-related projects. This would free up funding to increase repairs and renewals on our crumbling road network and tackle the local projects that won’t be delivered for decades under the current funding arrangements. This election we need a government that will return our taxes to deal with Auckland’s transport mess, something to consider when casting your vote.

Phelan Pirrie, chair Rodney Local Board
phelan.pirrie@aucklandcouncil.govt.nz