Smith StuartSTUART SMITH (National—Kaikōura): Thank you Madam Speaker. I too would like to start by acknowledging all those affected in the Auckland Tai Rāwhiti and Hawke's Bay events. Cyclone Gabrielle certainly had a significant sting in its tail and it's something that will live with us for a very long time. I'd also like to congratulate the new Minister Dr Deborah Russell. I have done that personally but I'd like to do that officially and get it on the record. I'm sure you'll do a fantastic job. I also acknowledge Dr David Clark who steered this bill right through to this point. He did that in a good fashion and ensured he engaged with us on the other side of the House and I'd like to acknowledge that. As Dr Russell said 90 percent of New Zealanders have insurance. So that's a really important positive for our population and we will find out the value of that in the coming weeks as we start to move from the reaction to the events that we've just had to recovery and as people then have to face making insurance claims. Fortunately now Earthquake Commission (EQC) claims can be made through an insurance company rather than going to EQC which will be a very much much smoother scenario than it was in the Canterbury earthquake sequence. That was very traumatising for those people involved who would finally get a decision from a EQC that their claim was over the cap and then they'd have to go to the back of the queue with their insurance company and go through the whole process again. This is one of the things that has been addressed by agreement but is now being formalised and I think that's a really important step.One of the other things which I'm sure is of interest to the House is the insurance companies were very concerned about having enough runway to get their IT systems set up so that they could deal with these changes in the Act around the cap and so on and they wanted 18 months. Now we're going to be just inside that period because this will come into force on 1 July 2024 and I'm sure you can do the maths on that. I did speak to an insurance company tonight though and they said it's going to be tight but they think they'll get there. I have to acknowledge that Dr Clark and I discussed this at a later stage in the process of this bill and we have been held up another couple of weeks for unavoidable reasons so it is a little tighter than we had anticipated. But this House has worked together to ensure that we passed it through these stages as quickly as we possibly could to try and make that as painless a process for the insurance companies as possible. As Dr Russell mentioned the change in the cap to up to $300000 is welcomed by those people that are living in higher-risk areas because their premiums will go down. But of course Madam Speaker as I know you're well aware there is no such thing as a free lunch. Those lower premiums in the high-risk areas are balanced out by higher premiums in—oh I might have got my risks round the wrong way—low-risk areas. So in somewhere like Wellington premiums will go down and in somewhere like Auckland premiums will go up—and for lots of those areas. So it's definitely a significant—Hon Damien O'Connor: I doubt they'll go down. It's a bit naive.STUART SMITH: Well it may not go down but of course they'll go up somewhere else. They're going to go up and I think that's the reality that we have to face.One of the things of the current events that I'm very concerned about came up during this bill which was about extending the scheme to a social flood insurance. Much as this is a social other natural disaster it doesn't cover flood damage for homes. It covers it for bridges culverts driveways etc. but it does not cover flood damage for homes. My concern which I raised in the select committee and I raise it again now is that the experience overseas with these sorts of schemes is we would lock people in to their homes. If we take somewhere like the Flockton Basin in Christchurch if you enable people to stay in those homes by making available insurance which might not be available otherwise they will be locked in to those houses. What's happened in the UK with just such a flood scheme—it's called Flood Re in the UK—was that they had a long runway until that scheme was supposed to be actually disestablished and it would give time for people to move out. They haven't moved out. They've established themselves and improved their homes and they've built new homes in that area and that's the danger of having a social flood insurance when actually relocation would be a far better option. I know this because I've spoken to the insurance companies about this. They'd be willing to be a part of it with local government and central government together to solve a problem that actually we have all created ourselves. The councils have tried in many cases to stop people building in these risky areas and developers have challenged them and they've won. So we're partly to blame—Parliament—because we haven't given the councils the tools to be able to actually manage this situation and we are now all going to bear the brunt of that. Now there'll be some of that in the current disaster but it's certainly by no means confined to that sort of issue. But it is something I raise.Actually in the Canterbury earthquake sequence EQC paid out $11.7 billion. That's a heck of a lot of money. This current disaster won't reach that level. However at that time there was $6 billion in the Natural Disaster Fund. There's $300 million in it now. EQC last year negotiated a record amount of reinsurance: $7.2 billion. That's a significant amount of reinsurance but EQC doesn't get to claim that until they have paid out $1.75 billion. So we've got $300 million. It's essentially $1.5 billion that the Government's on the hook for or EQC—it'll be the Crown that pays it—until we can get reinsurance money. I don't know how much the EQC payments will be. They may not be any higher than that $1.75 billion because it's really confined to drains culverts retaining walls driveways etc.—and in fact that's one of the features of this bill. EQC previously provided cover based on the depreciated value of retaining walls bridges and culverts but under this one it's the undepreciated value with a limit of $50000 per dwelling on a retaining wall and $25000 per dwelling on bridges and culverts—I mean it sounds like a lot but actually in some cases it might not be but you've got to draw a line somewhere. We had a field visit into Christchurch. We had people particularly concerned about retaining walls who came and gave evidence to the select committee. I don't know that we got it right—I think it's pretty close—but look the reality is when disasters happen there's always a line and sometimes people fall on the right side of the line or the wrong side. All we can do is do our best and I'm confident that the Finance and Expenditure Committee did its very best to try and balance those particular things off. But as I've said there will be people that fall on the wrong side.The operational efficiency issue is something that was also touched on by Dr Russell and I think EQC have come a long way since the Canterbury days; there's no doubt about that. But the reality is that in a disaster everybody is under pressure—the people that have been affected by it and the people that have to try and deal with it in these sorts of ways—and we're human beings. People do falter under those pressures. So with the best will in the world I know it's going to be difficult for EQC and the insurance companies to deal with what's ahead of them and I think while the framework in this bill—some of these things have actually been enacted really anyway and this is just tidying it up in the law. But I think it's in a lot better space than we were in back in the Canterbury earthquake days so I just hope that it goes the best possible way that it can for those people affected by these current weather events. So it's with that that I commend the bill to the House.