Rates to go up under Labour

July 12th, 2014 at 7:00 am by David Farrar

The Herald reports:

Homeowners and landlords could see hundreds of dollars added to their bills under proposals for a sweeping overhaul of the disaster insurance regime.

The policy unveiled by Labour’s Earthquake Commission () spokesman Clayton Cosgrove would see levies gathered by taking them off insurance premiums and adding them to rates bills so all residential properties are covered.

The levy is currently $207 a year for most homes but Mr Cosgrove said Labour would also lift the maximum payout by EQC from its current $100,000 cap.

Which will see the levy increase. So that may mean you rates end up going up by over $300 a year.

He acknowledged that the resulting increase in EQC’s total liability would mean the levy would probably have to rise but that insurance premiums would not necessarily fall to reflect the fact they would not include the EQC levy.

“I’ve never seen an insurance premium go down.”

So Labour is proposing that our rates go up by $300 or so but that our insurance premiums don’t go down.

Another winning policy.

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26 Responses to “Rates to go up under Labour”

  1. stever (26 comments) says:

    Would you really trust Len Brown with your EQC money ?
    Also why do labour make these policy announcements that end in a dig at a corporate ?
    And they wonder why big business won’t donate to them , how can they be expected to run our great country when the people that create the wealth won’t go near them

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  2. EAD (1,129 comments) says:

    Quick, look over there SQUIRREL!!

    Talk about cognitive dissonance and distracting your audience.

    I know it is election year and you support the big spending National Party, but can we have a bit of context here? What have local council rates being doing under National after all of the debt fueled inflation they’ve unleashed across the country?

    Snippets from the last month:

    Auckland – “Rates bills from mid-2012 were capped at a 10 percent rise in any one year, with any surplus carrying over to the next year”

    Wellington – “Swain acknowledged the increase had been pulled back from 6.1 per cent to 5.7 per cent”

    Christchurch – “An 8 per cent hike in rates is looming for Christchurch homeowners”

    Dunedin (the city with the White Elephant and “Maori leg chains”) – “with a 4.4% rates increase pencilled in for 2015-16″

    Much of this increase from out of control local governments is directly the result of our out of control Central government. The government that has imposed all sorts of bureaucratic rules, health and safety laws, “diversity” quotas, “Maori consultation/payoffs” while doubling down on the executive culture of civil servants including the people formerly known as “town clerks” who are now called “CEOs”.

    By all mean criticise Labour, but don’t turn a blind eye to National failings. Just as you give credit to National for any piece of good financial news no matter how tenuous(as if it is the government who trades with the world rather than autonomous individuals & companies) the link , I expect you to put all the blame on National when the economic news is not so rosy as will inevitably happen after the biggest debt fueled spend up in our country’s short history.

    They might sometimes talk differently, but to me and many others, they may as well be Labour.

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  3. Harriet (4,990 comments) says:

    “I’ve never seen an insurance premium go down.”

    It’s a fair call. The banks, petrol, and finance in general never reduce the prices of their goods and services.

    Instead you will probably get some other insurance ‘product’ – offered of course by all industry members -included in your current policy for the $300 – terrorism related insurance ect.

    However having said that, car insurance has come down considerably here in aussie in the last few years. Quite competitive.

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  4. Grendel (1,002 comments) says:

    What a bitter stab at the insurance companies, you know, the ones who paid for most of the chch rebuild.

    Sonce eqc is a seperate line item in a house or contents policy, the premium would certainly go down. Not the company premium as that has nothing to do with eqc but removing the eqc portion will lower your insurance payment. Of course it will go up even more when they add it to your rates.

    Its hard to believe that labour wants to add to the eqc, considering what a drag it was on the chch rebuild amd how out of date it is, they should be scrapping it completely.

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  5. big bruv (13,935 comments) says:

    Do these fuckwits think we have an unending supply of money?

    Or perhaps they have decided to punish anybody who has the temerity to own their own house.

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  6. igm (1,413 comments) says:

    The gutter sniping taxes of envy haven’t even yet been mentioned . . . the scum that support these leeches must be rejoicing!

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  7. big bruv (13,935 comments) says:

    Instead of raising rates on those who own their own homes why not charge the parasites who live in state houses rates as well.?

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  8. hj (7,033 comments) says:

    Rates will have to go up to deal with the weather?

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  9. WineOh (630 comments) says:

    Actually I’m not opposed to this in theory. The EQ Cover was based at $100K per household way-back when and has never been adjusted for over 20 years of inflation or the steady increases in the cost of house construction. 20 Years at 3% should see a cover rate of over $180K + GST, and would still deliver better value than through the private insurance industry.

    If you want to see what disaster insurance actually costs without the EQ Cover, get a quote for commercial premises. In a place like Wellington the natural disaster insurance premium exceeds the premiums for ‘normal risks’ by a big margin, often double or triple depending on the age and construction of the building. And this is with big excesses too.

    As for collection through rates instead of insurance, it does make EQ cover compulsory though, this has its merits too as it would remove the possibility of uninsured properties like those in the red zone of Chch where it was physically impossible to purchase insurance for land alone.

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  10. igm (1,413 comments) says:

    bb: Can’t touch State house parasites, they support Labour and Len Brown. What about the full implications of CGT, best a lot of home owners take a look at this, it is bloody scary and depreciating.

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  11. peterwn (3,277 comments) says:

    In the early 1980’s (I think) Jonathan Hunt had a similar sort of idea to load phone bills to cover the TV licence fee on the grounds there was correlation between TV ownership and those who had phones (there were no cell phones then). This and Margaret Shields’ idea that Kapiti Coast phone operators should be deployed on phoning elderly people each day (as direct dialling would reduce their workload) did not survive Rogernomics.

    Of course this idea is a nasty twist on Jean Baptiste Colbert taxation art – extracting as many feathers from the goose with the least hissing. Here he is transferring the ‘hissing’ from the insurance premium payer to the ratepayer then adding more.

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  12. Viking2 (11,491 comments) says:

    Apart from the inherent unfairness of taxing only landowners to supply all the community with its wish lists + essentials it is actually a better way to exacting EQC premiums. There are many who don’t insure or fail to have sufficient and when custard turns to shit the socialists that masquerade as govt. cannot stop them selves from bailing out the lazy or those taking risks on their own assets.
    So this would go a bit of the way to addressing the issue because no Govt. ever in NZ forever into the future is not going to do it.
    The arguments would be over the extent of cover and as it is now that’s an issue, Using the evaluers or QV to determine that EQC value would be a disaster in the making for at some point when a claim was made there would be arguments as to whom was liable if there was a shortfall.

    Allowing any Council in on the ACT would simply repeat the disaster that is leaky buildings.

    So while it seems eminently sensible it is fraught with issues that the Councils should not be lumbered with.

    Its is much better to remove the emotive socialist element from this and make it clear that the Govt. is never going to step up and take on your risk. It doesn’t for any of your other assets.

    People need to be responsible for thier asssets. No cover or not enough leaves them liable and that’s the way it should be.

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  13. flipper (4,084 comments) says:

    So the brainless Cosgrove, CminusT and the Herald(this morning) say the proposal is a “no brainer”. Yep, they are right. They have no brains.

    The only folks who did not have EQC cover are those who chose NOT to insure their properties. Those properties would have been totally mortgage free so any problems that arose for them from a lack of insurance cover is theirs, and theirs alone. They need to own it.

    This policy might appeal to the few thick heads in Canterbury, but they have already been offered (in the circumstances) more than fair assistance (compensation is not the proper way of describing it) – assistance which all taxpayers are funding.

    I am heartily sick of the Oliver Twist requests for hand-outs to ChCh. Get over it….. or move elsewhere.

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  14. freedom101 (505 comments) says:

    This idea could have merit. The EQC levy charged on insurance premiums is just a ‘pass through’ charge, and is handed to EQC by the insurance companies, a bit like the ACC levy on motor vehicle registrations. As the experience of Christchurch shows, when the chips are down the taxpayer ends up underwriting any shortfall, and those who have not paid insurance free load on everyone else. Politicians by their nature cannot hold the line on this – it’s someone else’s money after all! Large companies can insure offshore to avoid both the Fire Service and EQC levies, effectively free loading on the Fire Service. The idea of charging the levy via rates as a pass through to EQC deserves a closer look. There may be fish hooks, but let’s look more closely at it before dismissing it.

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  15. igm (1,413 comments) says:

    Wait till we see the financial help to be subsidised housing the increased influx of Muslims (masquerading as refugees, not unlike Manning’s friend Zaoui); it is unbelievable what ratepayers and taxpayers would be hit with under these filthy socialist bastards. Cosgrove also wants to put a registration fee on mobility scooters so Judith and her ilk better watch out!

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  16. hj (7,033 comments) says:

    My sense is that property Investors are more at home with National than Labour?

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  17. Paulus (2,633 comments) says:

    Please Mr Insurance Expert Cosgrove what will be the cost to EQC by having to pay more for wholesale cover ie Reinsurance if you lift the cap over Dwelling $100,000.
    Remember that Insurance, and principally International Reinsurers, have paid something like $!8 billion to the Christchurch recovery so far and that figure will continue to rise.
    I suspect that New Zealand will have difficulty finding new reinsurance cover at an acceptable price.
    By lifting the EQC $100,000 (and $25,000 Contents) to every insured house will increase EQC total liability enormously which will have to be factored into the purchase price.
    Of course every property should share the levy, not just houses with a Fire policy, covered by Insurance Companies.
    But of course Labour’s insurance flagship KiwiInsure can insure the whole lot – why not – they know it all.

    Why not wait for the whole EQC review currently underway.

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  18. B A W (100 comments) says:

    While there may be some rational in having some insurance for those who missed a payment before the big one or compassionate circumstances, the EQC system is a mess.

    You have people going to two insurance companies to sort things out. Much simpler to go to one company. Perhaps EQC should underwrite 75% of the cost of repairs instead? Having two insurance companies results in duplication of services, and forces EQC to hire lots of people to process claims.

    Then there is the fact that EQC charges a premium which is not based on regional risk, or individual risk of the structure.

    As for Labour’s idea of universal EQC – it misses the point. There are issues with the EQC scheme which need to be fixed.

    Will insurance premiums go down?
    Yes but. Insurance companies will write a price and hope that people buy it without shopping around. So many people may face not getting the full cost back.

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  19. Griff (7,822 comments) says:

    Why should those in the north with almost no earthquake risk pay extra in our rates, insurance and building costs for those who chose to live in earthquake prone regions?

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  20. Harriet (4,990 comments) says:

    The Conservatives support the rights of private property owners and the right to protect property.

    Rates is another weapon in the lefts arsenal to attack property owners. Senseless by-laws, regulations, registrations, notifications, ect are others.

    You own it — but permission to do anything at all —- must always be granted from the Socialist Councils of NZ.

    Tim Shadbolt made a lot of sense with his 100 Rules of Better Councils – or what ever it was called.

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  21. Manolo (13,840 comments) says:

    Rates and the cost of living will climb if the dreaded socialists gain political power. Higher taxes and fees will hit the middle classes in Labour’s futile attempt to redistribute wealth.

    NZ will the poorer for it.

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  22. wiseowl (899 comments) says:

    EAD nails it again.
    Quite frankly we need a revolution.
    Central and Local Government are becoming the economy and we need to put them back into their place.

    Get back to public servants and town clerks.

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  23. Southern Raider (1,831 comments) says:

    National needs to sort all this shit our leading into the election by stating they will repeal the Local Govt Act. Replace it with a new statement of what Councils are actually supposed to do.

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  24. Warren Murray (311 comments) says:

    Cosgrove deserves some credit for his honesty that moving the EQC levy from insurance bills to local govt will not result in a cost neutral transfer. In theory if our risk profile was static and the extent of cover didn’t change, a compulsory charge on rates would see a lower individual cost because the bludgers who don’t have insurance wouldn’t be able to opt out as they now do. But Cosgrove isn’t proposing this. He deserves some credit for signalling that their policy will see everyone paying more.

    It pisses me off greatly that support is given to the uninsured. Rates are successful because land based taxes are easy to set and hard to avoid.

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  25. burt (8,275 comments) says:

    Under Labour (xyz tax) to go up by ( x$ ) … And this is news ?

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  26. smttc (752 comments) says:

    Warren, you missed flipper’s point.

    If you have a mortgage (which is the overwhelming majority of property owners) then you have insurance because you cannot get the mortgage without it. And if you later refuse or neglect to pay the premiums then the insurance company notifies the mortgagee and the mortgagee pays the premiums and adds them to the mortgage.

    The uninsured don’t need our support.

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