The Government’s new council growth fund will deliver a fraction of the revenue Canterbury councils could have generated under a GST-sharing model, according to expert analysis.
The Incentives for Growth Fund, announced under Budget 2026, will see councils given cash bonuses for every new home they grant planning approval
But Infometrics chief executive and principal economist Brad Olsen calculated the fund would have distributed $86.8m nationwide if it was rolled out in the year to March 2026, about 14 times less than if the Government shared half the GST collected from new residential builds with local councils.
A GST-sharing policy had been pushed by Local Government NZ and proposed by Brooke van Velden in a 2022 member’s bill.
Ashburton District Council compliance and development general manager Ian Hyde said council did not have a lot of real detail about the growth fund yet.
“From what we know so far and based on current year’s numbers, Ashburton District could benefit by about $650,000.”
“We’re not sure if numbers will be calculated on consents, which may have several houses on the one consent, or on the actual number of new dwellings.”
Selwyn mayor Lydia Gliddon said before the budget, her council was among those across New Zealand calling on the Government to share 50 per cent of the GST on new residential builds.
“For fast-growing districts like Selwyn, existing ratepayers have been carrying too much of the burden for too long,” Gliddon said.
“We need funding systems that better match the pace of growth, alongside forward-planning from central government agencies so infrastructure and services keep up with the on-the-ground realities of growing communities.”
Gliddon said Selwyn would have received about $49m a year under a GST-sharing model, compared to the $9m Olsen calculated would come into the district from the new government fund.
Olsen said that across the 67 local councils, eight would have received over a million dollars – with three of those in Canterbury.
Auckland would have received $39.2m, followed by Christchurch City with $10.7m. Waimakariri ranked fifth with $1.9m, behind Queenstown Lakes ($8.4m), and Ashburton rounded out the top 10 with $648,981.
Gliddon said the growth fund “is a step in the right direction towards recognising that growth comes with real infrastructure costs for councils and communities”.
“This is a positive step but the detail and long-term certainty matter.”
What Selwyn spent the projected $9m on was the bigger question.
“Roading is an obvious choice, but there’s a lot more detail we’d need to see before we jump to decision making,” Gliddon said.
“We will start to work this into our long-term plan, although we need to see the finer detail on the growth fund.
“Transport and infrastructure investment remain critical for Selwyn.”
