Wagner Nicky: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Text is incorporated into the Bound Volume 
Wagner Nicky: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Sitting date: 26 June 2012. Volume:681;Page:3330. Text is incorporated into the Bound Volume.] 
NICKY WAGNER (National—Christchurch Central) 
: 
 It is my pleasure to talk about the Earthquake Commission—EQC—in this Crown entities debate. The people of Christchurch and Canterbury have got to know the Earthquake Commission well over the last 16 months and the commission is the organisation that we love to hate. We love to hate it but actually just a little bit of reflection would tell us how very fortunate we are that it exists. 
New Zealanders are heavily insured. Possibly about 99 percent of them have their homes insured and this is a unique situation. Across the world particularly in earthquake-prone regions due to cost most people are uninsured. We look at places like the US which is a country very similar to us but in those areas like San Francisco that are earthquake-prone only about 15 percent of people have their homes insured—only about 15 percent. It is similar in Japan. It is because of the Earthquake Commission this Crown entity that virtually all New Zealanders have insurance. Let me explain a little bit about that. 
The Earthquake Commission was set up in 1933 after the Napier earthquake and it was set up to protect homeowners. It was set up to insure homes contents and land. “And land” is particularly interesting because we are one of the very few countries in the world that insures land. 
Hon Gerry Brownlee 
: The only one. 
NICKY WAGNER 
: We are the only country in the world that insures land. Really what it was was a Government safety net for insurance at a low cost. That low-cost insurance continues today. It is actually what the commission has activated by a levy on your main insurance premium. The Earthquake Commission takes the first $100000 risk. This keeps the major premiums down. This means that insurance in New Zealand is cheaper and available to all and hence we have that great cover. 
What this means is that Christchurch and Canterbury have a real opportunity to rebuild safer better high-quality housing and mostly out of insurance. There may be a little bit of a gap but this is an exceptional situation simply because of the Earthquake Commission. In comparison with recovery scenarios in other countries we are incredibly fortunate. There have been about 600000 claims to the commission over the last 11000 earthquakes. Those claim expenses totalled $11.4 billion in 2010-11 and that left the commission with a net deficit of $7.1 billion for the year ended June 2011. The Natural Disaster Fund was at $5.9 billion pre-earthquake with another $2.5 billion available for global reinsurance. That fund has now closed with a deficit of $1.2 billion. So what we are seeing here is that the Earthquake Commission’s liabilities exceeded its assets in 2011. But that is the way the commission is organised and the Crown has committed to meet that shortfall. The Crown has committed to meet it under section 16 of the Earthquake Commission Act 1993. So because of the Earthquake Commission people who have insurance have no need to worry that they will not be paid out. 
We all know that 2010-11 was an exceptional year for the commission. Both the September and February earthquakes came in the top five insurance claim situations in the globe. They are enormous claims. The Earthquake Commission is expecting to remediate land and to repair and cover contents for over 100000 homes. I believe that it has made significant progress. It has paid out $3 billion already and that is 10 percent of Canterbury’s GDP. So it has been a big shot in the arm and it has kept our economy going. It is averaging $37 million a week. It has repaired 15000 homes and to give you an idea about what that looks like that is the number of houses that are in Timaru. The commission has repaired the equivalent of Timaru and we have got about 35000 houses still coming through the process. We have got a long way to go and many people are tired and frustrated. But I think it is because of the Earthquake Commission that New Zealanders are insured. Because the commission takes that first $100000 risk we know that our houses will be repaired. We know that in the long term—