Nicola to Wayne: 450 million reasons to say ‘no’

Finance Minister Nicola Willis has given Auckland Mayor Wayne Brown a $450 million thumbs-down to his request for funds back from central government.

Brown, after a unanimous decision of councillors and the Independent Māori Statutory Board, wrote to Willis seeking the return of $415m a year in GST on rates that goes into Crown coffers.

He also noted the Crown did not pay rates on some exempt properties like health and education facilities – a sum estimated to be around $36m a year.

Brown told Willis the return of the GST alone could have meant this year’s average Auckland residential rates bill would fall by 6.5 percent rather than have to increase by 7.5 percent.

He noted that in Australia, state governments received about 45 percent of revenue from the federal government but here, Auckland Council received “a paltry 12 percent” from Wellington.

“Aucklanders are being shortchanged by central Government. This is not new, but as a new coalition Government you have the chance to fix it,” the mayor wrote on March 19.

But Willis, in a letter dated April 29 and made public ahead of Thursday’s Auckland Council governing body meeting, was unmoved.

“Regarding GST, a transfer of revenue equivalent to GST on rates is not under active consideration,” she said.

(The NZ First party policy pre-election had been to hold a select committee inquiry into the return of GST paid on rates, but that did not make it into the coalition agreement.)

Instead, Willis told Brown the coalition hoped its housing policy could see councils “receive a share of economic dividend from new housing supply.”

Willis said the coalition agreement between National and Act committed to consider if a portion of GST collected on new residential builds could be shared with councils. That is distinct from the GST on all rates paid, as sought by Brown and the council.

And she listed possible additional funding mechanisms such as “time use charging, value capture and public private partnerships” as likely to benefit local government.

On the topic of the Crown paying Auckland rates on its hospitals, schools and conservation estate, the finance minister was equally dismissive. “We will not be reconsidering rates exemptions for certain types of central Government properties at this stage.”

Pointing out that Kāinga Ora housing, emergency service and administrative buildings and defence properties did pay rates, Willis also reminded Brown and his councillors that “all properties, whether rateable or non-rateable, pay water, sewage and refuse collection charges.”

Brown told Newsroom late on Wednesday he thought Aucklanders would disagree with the decision.

“But I’m glad this Government does recognise the need for more funding tools for Auckland that better recognise its contributions to Wellington.

“Promises have been made and I look forward to delivering these to Aucklanders.”

Brown said the return of GST on rates had “after all [been] a suggestion from a government report on the future of local government.”

His letter had been written after “the rare event of a unanimous decision and at the express request not only of the whole council but also Houkura, the Independent Māori Statutory Board.”

His plea is the latest from Auckland over at least eight years, with former mayor Phil Goff having first called on the then National Government to return GST on rates to Auckland to help fund infrastructure from 2016. His calls to that National-led, then the subsequent Labour-led and Labour administrations also fell on deaf ears.