Quake costs double

August 30th, 2011 at 10:18 am by David Farrar

Andrea Vance at Stuff reports:

The cost of the Canterbury earthquakes to the Government has more than doubled to $7.1 billion.

Finance Minister Bill English this morning said the Commission has increased its liability by about $4 billion to $7.1 billion.

He said the announcement would not affect homeowners claims.

The cost blowout includes an increase of $2.17 billion from the 22 February earthquake and $1.42 billion from the 13 June earthquakes and other aftershocks, which were not previously included.

At a press conference, English said the new estimate follows a risk assessment, based on analysis of damage claims.

He said the extra costs can be met through the Natural Disaster Fund which held about $6 billion before the first earthquake. The government will meet the shortfall. also has reinsurance in place to help meet the cost of any future events.

“Today’s announcement will not affect homeowners’ claims, which EQC will continue to pay in full. And it will not delay rebuilding in Christchurch,“ English said.

Basically this means an extra $3b to $4b of borrowing. There is no choice about this – it is just what the costs are.

But it is worth reflecting that even by their own calculations, Labour’s tax plans require greater Government borrowing for at least the next seven years. And that is before we even get to their spending plans. Will these extra costs make Labour reconsider their policy of tax cuts and boosting benefits?

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24 Responses to “Quake costs double”

  1. YesWeDid (1,048 comments) says:

    How does an article on the cost of the earthquakes get turned into a dig at Labour’s tax plans?

    It’s like your trolling on your own website. Maybe the earthquake costs might make National reconsider it’s tax cuts, isn’t that a more relevant question??

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  2. toad (3,674 comments) says:

    Time for the Government to reconsider Russel Norman’s proposal for an earthquake levy.

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  3. Bed Rater (239 comments) says:

    YesWeDid, would have to agree with you on your first point, every KB post seems to turn into a dig at labour these days.

    I assume DPF is just a bit insecure because he realises the differences in principles between the two parties gets smaller and smaller with each passing day.

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  4. Ender (105 comments) says:

    I think we should levy the fuck out of the rich pricks that are evil and greedy but not take any of the money back that we give to the poor defenceless poor unskilled people of this country

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  5. YesWeDid (1,048 comments) says:

    No Ender, just borrow more money, my kids can pay for this generation.

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  6. Peter (1,712 comments) says:

    my kids can pay for this generation.

    Sounds good to me. I have no kids.

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  7. swan (665 comments) says:

    Is there a shortfall or not? – The text isn’t very clear:

    “He said the extra costs can be met through the Natural Disaster Fund which held about $6 billion before the first earthquake. The government will meet the shortfall. EQC also has reinsurance in place to help meet the cost of any future events.”

    If the costs can be met through the natural disaster fund, presumably there isnt any additional borrowing due to EQC obligations (note this is obviously not the only source costs for the government).

    The EQC fund is user pays – i.e. residential property owners, so shouldn’t affect government borrowing directly unless the fund becomes insolvent.

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  8. Graeme Edgeler (3,289 comments) says:

    Basically this means an extra $3b to $4b of borrowing. There is no choice about this – it is just what the costs are.

    So 8 ~ 10 weeks of borrowing?

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  9. dime (9,972 comments) says:

    toad – another tax from you people??

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  10. s.russell (1,642 comments) says:

    Will these extra costs make Labour reconsider their policy of tax cuts and boosting benefits?

    I think it more likely that as Labour’s poll rating falls (and see the NZ Herald today) they will grow ever more irresponsible as their desperation increases and they figure they have nothing to lose.

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  11. adze (2,126 comments) says:

    Have to say I agree with ywd’s first point – seems kind of left field (n.p.i); but on the other hand there’ll be plenty of posts on left wing blogs turning this against National somehow.

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  12. BeaB (2,123 comments) says:

    The levy is such a dumb idea. That’s why we pay tax and insurance premiums – and will be paying for Christchurch for decades. And rightly so. The costs should be spread over many years, not all heaped on today’s taxpayers. Why do Greens and Labour always want to impose new taxes?? They seem to hate us having any control over our own earnings.

    We are now seeing some of the enormous complexity of dealing with this catastrophe while the media keep focusing on small issues and opportunistic politicking from Canterbury MPs.

    I think it is time we gave huge credit to Gerry Brownlee, EQC and others who have worked their way through these unprecedented difficulties without pandering to ignorant clamour.

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  13. Murray (8,847 comments) says:

    Have Gerry buy his own lunch. that should save us a bit.

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  14. big bruv (13,904 comments) says:

    Time for the government to start cracking down on benefit bludgers and DPB slappers.

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  15. ben (2,380 comments) says:

    Unforeseen blow out in public expenditure in election year? Who’d have guessed.

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  16. backster (2,172 comments) says:

    The appointment of a panel of experts, Jenny Shipley, retired judge. and token maori at twice the accepted rate (for real experts) indicated to me a culture of waste, (to hell with the costs) so little wonder that costs will escalate at something approaching the rate of the treaty claims industry. Doesn’t matter though the Government will pay.

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  17. MyNameIsJack (2,415 comments) says:

    lies, lies and moe lies as National pretends IT is funding earthquake repairs.

    Finance Minister Bill English this morning said the Earthquake Commission has increased its liability by about $4 billion to $7.1 billion.

    That’s right, the

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  18. MyNameIsJack (2,415 comments) says:

    lies, lies and moe lies as National pretends IT is funding earthquake repairs.

    ,i .Finance Minister Bill English this morning said the Earthquake Commission has increased its liability by about $4 billion to $7.1 billion.
    That’s right, the EQC’s costs, NOT the govt’s. Ever wondered where the EQC levies go?

    He said the extra costs can be met through the Natural Disaster Fund which held about $6 billion before the first earthquake.

    So 7.1 billion less 6 billion = 3-4b? got a calculator handy?

    tHis is just more spin, trying to justify huge govt borrowings to pay for rich prick tax cuts.

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  19. dime (9,972 comments) says:

    the govt doesnt pay for tax cuts snapperhead

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  20. m@tt (629 comments) says:

    “Will these extra costs make Labour reconsider their policy of tax cuts and boosting benefits?”
    As others have alluded that’s a bullshit sentence.
    What is actually relevant is what the current government, that by most sane accounts will be returned for another three years, intend to do. Reconsidering tax cuts, as you suggest, would be a great start so I look forward to you demanding National reverse their tax cuts.

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  21. BeaB (2,123 comments) says:

    Backster You are kidding, surely. The amounts the panel cost will be trivial. It made sense to me that hauling a judge out for a few hours at a time would hardly be worth it for him, or for the others, unlike a commission for instance that sits for a specified length of time.
    And this surely a legitimate cost in any case if we want decisions reviewed.
    Wish I knew where all these rich people are that some of you keep raving about.

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  22. m@tt (629 comments) says:

    “the govt doesnt pay for tax cuts snapperhead”
    Yeah true. They just take a drop in revenue instead. You could say it’s the same as taking a pay cut, your mortgage payments don’t actually increase, they just becomes relatively more difficult to meet.

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  23. Viking2 (11,471 comments) says:

    Bed Rater (150) Says:
    August 30th, 2011 at 10:32 am

    YesWeDid, would have to agree with you on your first point, every KB post seems to turn into a dig at labour these days.

    I assume DPF is just a bit insecure because he realises the differences in principles between the two parties gets smaller and smaller with each passing day.

    BIG FAIL.
    Neither of them have any principles.

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  24. Viking2 (11,471 comments) says:

    BeaB (878) Says:
    August 30th, 2011 at 11:56 am

    Wish I knew where all these rich people are that some of you keep raving about.

    Australia,Bermuda, Monaco cause you slobbering socialists have driven them away.

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