Norman Russel William: Questions for Oral Answer — Questions to Ministers 
Norman Russel William: Questions for Oral Answer — Questions to Ministers 
[Volume:673;Page:19455] 
5. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Will the Government have to borrow further to pay for the latest Christchurch earthquakes? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 We will not have a clear idea of that until we know the likely costs and where they fall. However it does appear that the damage as a result of the most recent earthquakes has occurred largely in areas that already required substantial repair. The member will be aware that the Government set aside a fund of $5.5 billion in the last Budget and that allowed for considerable uncertainty around the estimates of costs. So it could be some time before we know whether that particular event will require more money to be allocated to that fund. 
Dr Russel Norman 
: Will the Minister reconsider the case for raising an earthquake levy given that the most recent earthquakes have thrown into doubt what the final cost might be? 
Hon BILL ENGLISH 
: No we do not plan to reconsider it. The Government as we indicated in the Budget has the capacity to fund its share of the Christchurch rebuilding costs. There are other more significant issues at the moment that need to be resolved to allow the rebuild to continue. Our funding is not the main one. 
Dr Russel Norman 
: In light of his earlier comments that the Government is very keen to reduce Government borrowing would an earthquake levy not be one way to reduce Government borrowing? 
Hon BILL ENGLISH 
: In a technical sense I suppose it would as would putting up taxes raising GST further or whatever else. The Government has come to what we believe is a pretty balanced approach whereby we are constraining Government spending and we have done a reorganisation of the taxation system which we believe will be beneficial to the economy. Now we just want to get on with growing the economy having resolved those issues. 
Dr Russel Norman 
: Is he aware that the Christchurch City Council proposes to raise an earthquake levy on ratepayers and is it not a cruel paradox that the very people who are least able to pay a levy—the ratepayers of Christchurch—may have to pay a levy when the rest of the country does not? 
Hon BILL ENGLISH 
: Certainly the burden of the earthquake falls by far the most heavily on the people of Christchurch. That is why I think the rest of New Zealand will effectively be paying for the rebuild. We have borrowed the money now and it has to be repaid later with interest. All New Zealanders will be contributing to that. The Government is working very closely alongside the city council to work out the best division of the burden of costs including those costs that fall on the council. 
Dr Russel Norman 
: Does the Minister stand by his earlier argument that an earthquake levy is the wrong way to pay for the earthquake rebuild when the economy is weak or in recession in light of the fact that Treasury now predicts an average of 3.1 percent growth over the next 5 years? 
Hon BILL ENGLISH 
: Yes. We considered all these issues in the period between the February earthquake and the Budget and the Government believes it has struck about the right balance between on the one hand generalised fiscal constraint to assist the progress of the economy and get the Government’s books into order and on the other hand our ability to fund the earthquake rebuild. Had the costs been larger or had it been more difficult to get the deficit under control of course it is possible that we could have looked at either a levy or a tax increase. In the end we decided that that was not a good idea.