Brownlee GerryHon GERRY BROWNLEE (National): Thank you Mr Speaker. This is a very timely bill and one that I think the National Party will enjoy working through with the select committee process. It has enormous advantages in it for New Zealanders. While it's true that in 2010 the Earthquake Commission (EQC) was a bit of a sleeper—that no one had ever really thought we'd ever face the problems that it faced both in September of 2010 and then February of 2011—that is no particular excuse for them not being ready for those sorts of events in the future. But the Minister said there were 22 people working for EQC in September. It's grown by four. My recollection is that they told us 18 but whatever it was a very small group of people. It had been quite an easy task for them to operate over the 17 years the Act had run without any particular consideration of the need for change.The organisation did swell by quite a few—to I think over 1800 people eventually working for it in a relatively short period of time. When any organisation has that sort of growth over a matter of months there is inevitably going to be some problems. I think it's worth remembering though that the total number of claims that were dealt with as a result of the Canterbury earthquakes was in excess of 700000—spread across land claims building claims and personal property. I think their decision that was made eventually to remove personal property—so in other words breakages that you get around the house etc.—from the EQC coverage was the right thing at that time.What has always been difficult has been the issue of land claim and the extent to which there should be coverage on the built property as well; then of course the breadth of which coverage should be administered or available depending on the type of natural disaster that might have been experienced by someone. It is a very good scheme and well worth holding on to—quite unique in the world—and the only scheme that I'm aware of that actually does cover land damage. While there is a problem with how you might define that it is enormously valuable. One of the things that I think it'd be worth the Finance and Expenditure Committee teasing out a bit further notwithstanding the fact that officials have clearly done quite a job among themselves in debating these issues will be whether or not those amounts those caps for retaining walls and for bridges etc. are sufficient.If one were to take a city like Wellington many dwellings cannot exist without their retaining walls and those retaining walls might be both forward and back of the property or to one side—whatever it might be. If the property cannot be repaired without the retaining wall being repaired I think there's a real question about how much should be embodied in the whole of that cap coverage. No one will ever get this totally right and it would be a good idea if we could have enough time at the select committee to go through all of the circumstances that people have had to deal with in the extraordinary events of Christchurch.It's worth noting too that of that large number of claims—that very large number of claims—over 160000 of them were repaired through the EQC process. So they were houses that were damaged up to the then cap of $100000. Yes there were circumstances in that that were difficult for some people but the vast majority managed to get their lives back together relatively smoothly. One thing I've always said is that EQC can't go away nor can the natural hazards arrangements that will come after this. They're there permanently and those claims don't shut. And that I think has been a cause of quite a bit of difficulty for successive Governments as they've dealt with those particular issues. But I think it's important that that remains one of the open aspects of this type of coverage. EQC was one of the biggest purchasers of reinsurance of any company in the world. It's something that perhaps we struggle to get our heads around. We're only covering 5 million people. We're covering the dwellings that exist across the country that number only in the few million. But none the less because they were one big buyer they were able to buy very very well. The argument always against raising the cap from initially $100000 then to the $150000 and then to the $300000 as proposed in this bill was that it would mean that the Government agency was subsidising the private sector—the private insurer who picks up the balance of that. That is the sort of nonsense argument that Treasury needed to be completely debunked on. The reality is that the cost of that insurance is the cost of that insurance no matter who buys it. It's arguably more expensive for private companies to buy smaller chunks to cover that first $300000; so I personally welcome that new figure. But I do offer this caution: in 1992 when the legislation first came into the House for the 1993 Act $100000 would pretty much replace quite easily the average home in New Zealand. That is not the case with the $300000 proposed in this. When you look at the cost of building these days you look at the cost of the average home and you look at the price of new builds then you know that we're possibly not even at the halfway point with that particular figure. So it will be interesting to hear through that committee process from officials as to how they've managed to come to that figure and justify that figure. Remember too that the reason that the EQC was structured the way it was in 1993 was because the insurers of the day had decided they weren't going to cover New Zealand for earthquakes any longer. That I think is an ever present threat. But even with the huge costs that have been met by insurance as a result of Canterbury and Kaikōura and other smaller tremors around the country and other events around the country the reality is that it remains a very good market for insurers because of that deep penetration that we have in our market.It's worth noting that when there was the proposal for the Government to buy out properties that were so badly damaged they were difficult to repair if at all or couldn't be repaired and where the land was so badly damaged it couldn't be built on again the expectation was that up to—working on international figures—15 percent of households might be uninsured. In the event it was under 2 percent—quite an extraordinary thing. That indicates that New Zealanders do value their properties and it reinforces the obligation that falls on a Government to ensure that there is a structure in place that will give people the sort of surety that they need.The questions that will come into play here will be that question I raised before—the question of: is the coverage amount enough for the retaining walls and bridges and other ancillary structures around a home that might actually be the reason why the home is able to be built in the first place. Then of course that big discussion about the level of coverage at the current rate looking to be less than 50 percent of the cost of a new house. But none the less all of that might be quite reasonable. We look forward to the select committee process and participating fully to get a better bill a better legislative arrangement in place for New Zealanders wanting to protect their assets.ASSISTANT SPEAKER (Ian McKelvie): Members the time has come for me to leave the Chair. The House is adjourned until 2 p.m. next sitting day.Debate interrupted.The House adjourned at 10.02 p.m.