17 April 2026, 10:00 am – The hint from David Seymour about a new policy for councils to receive a portion of the GST collected on construction projects in their areas, has been criticised by tax reform groups Tax Justice Aotearoa (TJA) and the Better Taxes for a Better Future Campaign. TJA and Better Taxes say this is just an excuse to further cut government public services, without properly tackling the issue of local government funding.
“There may be some merit in sharing GST raised in an area with the local council but, according to media reports, this policy has been costed at $5b over 4 years. Unless central government raises revenue from other forms of taxation, that will just mean further cuts to our already stretched public services,” says Glenn Barclay, spokesperson for TJA and Better Taxes.
“Minister Seymour is quite explicit about that when he said that government needs to get smaller. That really means that there will be more cuts to services that New Zealanders rely on like health and housing, and further moves to private services and user pays, in the middle of a cost of living crisis.”
“We invite the Minister to review our recently launched Tax Policy Statement to see the kind of policies that could be used to offset this loss of central government revenue,” says Barclay. “If they were willing to bring New Zealand into line with the rest of the OECD by taxing capital gains, or look at a net wealth tax on the very wealthy, then policies like this might become affordable.”
TJA and Better Taxes also point out this policy appears to have been developed without consideration of the wider issue of local government funding.
“A number of interesting ideas for the funding of local government have been raised over the years and this could be one of them, but the Government needs to take a holistic look at local government revenue raising tools,” says Barclay.
“Local Government funding is constrained and rate payers are feeling the pressure of increasing rates. Councils need to be properly funded for the functions they're required to perform, no strings attached. This policy runs the risk of councils cutting corners on the enforcement of important building regulations in order to boost their revenue. We have been through the leaky buildings' disaster, so we know what cutting regulatory corners can look like.”
TJA and Better Taxes will be watching the budget closely to see whether the Government coalition partners National and NZ First have just fallen into line with yet another policy driven by ACT Party dogma, or whether there are conditions built in that will ameliorate the worst effects of it.