Adams Amy: Questions for Oral Answer — Questions to Ministers 
Adams Amy: Questions for Oral Answer — Questions to Ministers 
[Volume:666;Page:13834] 
2. 
AMY ADAMS (National—Selwyn) 
 to the  
Minister of Finance 
: What reports has he received on the cost of damage from the Canterbury earthquake? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Preliminary advice from Treasury estimates that the total bill for earthquake damage could be about $4 billion. This figure incorporates the damage to residential buildings and property largely covered by the Earthquake Commission; the damage to commercial buildings largely covered by private insurers; the damage to local government infrastructure some of which will be covered by insurance carried by local government; and the cost of damage to central government assets. I would caution that this is still a very early estimate and as more information becomes available we will have a better capacity to focus on the total cost. I must say though that right now the Government is not focused on getting the total cost right; that may take years perhaps. It is focused on restoring to people their homes businesses jobs and schools. 
Amy Adams 
: Who will pick up the bill for the damage? 
Hon BILL ENGLISH 
: In the first instance insurance companies will pick up a large proportion of these costs. The Earthquake Commission has significant reserves significant enough to cover the larger estimates of its costs including reinsurance. Private insurers have reassured us that their own reserves and reinsurance arrangements will be adequate. So far the Earthquake Commission has received 36000 claims and it expects this to rise to around 100000 claims in coming weeks. It is receiving great cooperation from telephone companies and from the Accident Compensation Corporation and others who have helped to augment the Earthquake Commission’s call centre capacity and therefore its ability to take and process claims. 
Amy Adams 
: What advice has he received on how the earthquake will affect economic growth? 
Hon BILL ENGLISH 
: First of all any advice on economic growth cannot and does not capture the cost to individuals of the severe disruption and concern that they have. Treasury advises that the earthquake is likely to lower GDP growth over the next 2 or 3 months. However it expects that in the 12 months beyond that the earthquake will have a net benefit on GDP. If members can imagine the large amounts of cash that have been held in reserve by insurance companies then they will understand that. The Earthquake Commission will be saved by for instance the sale of shares owned overseas and that money will be injected into the Canterbury economy. So we would expect there to be a positive effect over the next 12 months or so. 
Amy Adams 
: What are some of the other costs that people may face as a result of the earthquake? 
Hon BILL ENGLISH 
: Obviously businesses and employees face a loss of potential income because of for instance damage to stock held by a business or simply because the workplace has closed. That is why the Government has set aside initially $15 million for a wage subsidy for quake-affected businesses and workers. In the first day and a half since the subsidy was announced Work and Income has received about 342 calls from employers 36 formal applications and in fact the first few applications have already been approved. We expect this to grow quickly over coming days. I have also spoken to the chief executives of the main banks who have confirmed that they will do what they can to accommodate the special needs of their personal and business customers in Canterbury.