Winston Peters wants New Zealanders in the regions to benefit more from the wealth they help generate.

Photo: RNZ / Diego Opatowski

About 500 people packed into Palmerston North's Convention Centre yesterday to hear the New Zealand First leader launch his party's regional election campaign.

With the election less than three months away, Mr Peters said it was time the regions got their fair share of GST and royalties from resources.

He wants the regions to get a 25 percent share of the government's royalties from water, oil and mineral extraction and for the GST paid by tourists to be returned to the region in which they spent their money.

Thames Coromandel Mayor Sandra Goudie said Mr Peters was on the money, and getting a slice of tourists' GST would help regions cope with the pressure they put on infrastructure.

"Yeah I'd back that one - it's certainly a timely comment and it's something that local government has been lobbying to get for quite some time in various forms.

"I think it's certainly better than the bed tax that is being proffered by (Auckland Mayor) Phil Goff for Auckland."

Mr Peters said while the regions generated an enormous amount of the country's wealth - they received little in return.

"Now I notice you go down the West Coast no Maseratis there, no BMWs virtually there.

"I go to Thames, where all the extraction of gold happened, I don't see any Maseratis there or any of the flash cars - no - because they've just all been gouged out for central government's advantage."

Ms Goudie said that actually most mining occurred in the neighbouring Hauraki district and they would be excited by Mr Peters 25 percent royalty proposal.

Gisborne's mayor Meng Foon said the GST idea was fantastic.

He said he had a similar proposal that he would be presenting to the Local Government conference next month.

"Tourists that come here the ratepayers still have to pay for their rubbish, the water usage, the use of the roads and other public amenities like toilets."

"So if they spend something in our district it would be good if a proportion of that GST goes to helping the residents pay for that infrastructure and the operation of that infrastructure," Mr Foon said.

But Finance Minister Steven Joyce said Mr Peters' proposals would knock a $1 to $3 billion hole in the government's books.

Mr Joyce said the regions were already getting their fair share.

"Well, the government went and did the exercise and looked at all its expenditure...across all the regions in the country and we found that all the regions got about the same amount of money on a per head basis," Mr Joyce said.

"Except, if anything, the Aucklanders the Wellingtonians and Christchurch people got a bit less and the small regions got more."

Mr Joyce said that was because of the economies of scale.

Mr Peters also said it was wrong that foreign companies could bottle New Zealand water for export for a pitiful token fee while making millions of dollars of profit.

Mr Joyce said the government had set up a technical pricing group to look into the cost of water but that any returns from this activity wouldn't be a significant amount of money.

And New Zealand First will again be championing its student loans write-off scheme at the election. The party proposes that for every year a student stays in the country and works, one year of their debt is written off.