Councils are hoping to get the Government to increase its planned contribution for fixing the $11.5 billion leaky homes crisis in time for more leaky home money for the Budget. 
Wellington Mayor Kerry Prendergast, who is leading the negotiations for councils, said “urgent” meetings had been arranged in an effort to convince the Government to increase its offer of paying 10 per cent of the repair bill. “Clearly, I would be wanting to be talking to the appropriate ministers before the Budget … because otherwise we’ve lost another year.”
But any chance that a new report showing a $2b tax windfall from fixing more than 40,000 homes would pressure the Government into boosting its offer has gone after Building and Construction Minister Maurice Williamson dismissed the findings.
He made it clear that the Government would not be swayed from Treasury advice, which found there would be no increase in GST receipts from the work. That was also likely to apply to other taxes.
“Any effect would be marginal at best, as the leaky home repairs would crowd out other building and construction work that would otherwise have taken place.”
The report, by economics research company Covec, was commissioned by North Shore City Council. It found the Government would get back 25 cents from every dollar spent repairing leaky homes, meaning it would reap $2b from the estimated $8b of actual building costs.
It was presented to the Auckland mayoral forum yesterday.
North Shore Mayor Andrew Williams said he wanted councils to use the report in negotiations with the Government to get a firm deal on splitting costs in time for the Local Government New Zealand conference in July.
Ms Prendergast said she wanted the matter resolved in time for cash to be unlocked in the May 20 Budget. “We want to negotiate something that has them putting in more than 10 per cent, and they clearly rejected our 25.”
She had not read the North Shore report, but said it would need to be “robust” to counter Treasury’s findings.
Treasury advice in December rejected claims of a GST windfall from fixing leaky homes as the cash that would be spent would have otherwise been spent elsewhere.
Mr Williamson said that also applied to the potential increase in company, income and other tax.
But Auckland Mayor John Banks said the North Shore report had merit as the cash needed to repair leaky homes would have to be borrowed, and was therefore new and additional spending.