The Government's decision to raise GST to 15% could cost the Dunedin City Council up to $750,000 in fees and charges revenue alone, a figure that may be passed on to residents.
After October 1, the Government will be taking more every time Dunedin drivers feed the city's already unpopular parking meters, swimmers pay for entry to Moana Pool, or builders shell out for building consent fees.
Council finance and corporate support general manager Athol Stephens said the council collected about $97 million a year in fees and charges, and the extra money needed to pay the increased tax was expected to be somewhere between $500,000 and $750,000.
It would not be the full 2.5%, because some charges, like rent paid on council flats for instance, were GST exempt.
"There are practical issues the council will need to deal with in any change in fees and charges because of the GST increase," Mr Stephens said.
"For example, under the 12.5% GST regime, of the $5 paid into a parking meter, about 55.5c goes to the Government as goods and services tax.
"Under the 15% GST regime, that figure rises to 65.2c.
"This is a loss in revenue to the council of nearly 2%."
"This effect, magnified by the many millions of dollars of fees and charges on everything from library rentals, Moana Pool admission charges, parking revenues and building consents, adds up to a significant sum."
Not every council charge would be affected, as liquor licensing and parking infringement charges, for instance, were set by government statute, and could not change unless the statute was changed by the Government.
Asked how the council might make up for the loss, Mr Stephens said there were issues, such as that pool charges were usually set at $1 or 50c increments, so it was difficult to raise them to cover 5c. The Hamilton City Council had responded by only raising more frequently used fees.
"That covered the shortfall on all the rest."
Asked if the GST rise might affect the price of the Forsyth Barr Stadium, Mr Stephens said it would not, as any GST paid out was claimed back as an expense from the Inland Revenue Department.
The council would monitor the extent the increase in GST affected its revenues, and might have to consider altering its charges, something that could happen during the next financial year.
"We're just going to have to keep an eye on it."
