Turei Metiria: Questions for Oral Answer — Questions to Ministers 
Turei Metiria: Questions for Oral Answer — Questions to Ministers 
[Volume:670;Page:16970] 
6. 
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister of Finance 
: Has he considered raising a temporary levy on income to help fund the rebuilding of Christchurch; if so how much could it raise? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 As I have said publicly the Government is keen to get much better information as time goes on about what costs are likely to be incurred in the rebuilding of Christchurch. Many of those costs will be one-off costs and therefore more appropriately funded by higher debt in the short term. It is also likely that earthquake levies applying to all residential housing in Christchurch are likely to rise significantly as the costs of Earthquake Commission insurance rise. At this early stage we believe that those two sources of funds are the most appropriate way to pay for whatever outgoings the Government has for the reconstruction of Christchurch. 
Metiria Turei 
: Does he agree that a fair and balanced economic response would be one that raises a little more revenue from those who can afford it adds a little more debt to be shared over the medium term and reprioritises infrastructure spending to where it is most needed at the moment? 
Hon BILL ENGLISH 
: It is important that we achieve a fair and balanced response. One of the reasons the Government is reluctant to impose a new levy is simply that when the economy is relatively flat and the whole country would benefit from stronger economic growth we do not want to put in place a levy that is likely to slow down that process. If there are other ways we can fund the rebuilding of Christchurch that do not directly affect the prospects of stronger economic recovery we would prefer to use those methods. 
Metiria Turei 
: Does he agree with Fran O’Sullivan who argues that by setting a levy at a high threshold the additional tax is unlikely to affect economic growth because high-income earners are currently using their wealth to retire debt as opposed to consume? 
Hon BILL ENGLISH 
: No I do not necessarily agree with Fran O’Sullivan on quite a range of issues. What the Government is doing will ensure that we go through a process where Earthquake Commission levies are likely to go up which is an appropriate measure and will affect every homeowner in New Zealand. We will be looking at the priorities for Government spending over the next 3 or 4 years—something like $300 billion of spending. We believe that those will be better ways of dealing with the increased debt that inevitably will go with Government funding of the rebuilding of Christchurch. 
Metiria Turei 
: Why does the Minister today accept that growing Government debt is better than raising revenue to pay for the earthquake damage when before the election he used the size of Government debt to justify the sale of State assets? 
Hon BILL ENGLISH 
: This Government has always been reluctant to unnecessarily increase Government debt. However we are not completely rigid about it. The fact is that we need to incur significant costs to support the people of Canterbury even in terms as basic as giving them cash in their pockets over the last couple of weeks so they can live. We are committed to rebuilding Christchurch. Those are our top priorities and if we have to incur some extra debt to achieve them then we are willing to do so. But over the next 3 or 4 years we need to reduce our debt levels because we are a country that is still vulnerable with high levels of debt. We do not want to increase that vulnerability. 
Metiria Turei 
: If he does not agree with Fran O’Sullivan does he agree with Bernard Hickey who says that the fastest fairest and safest way for New Zealand to save as a nation—given the Minister’s concern about savings—and to use those savings to rebuild infrastructure is to impose an earthquake levy on those who can afford it and that that is the most effective way to do it? 
Hon BILL ENGLISH 
: No for similar reasons to why I disagree with Fran O’Sullivan who makes the same proposition. 
Metiria Turei 
: Does the Minister agree that an earthquake levy is more transparent than Government spending cuts and that it takes the politics out of paying for the rebuilding of Christchurch? 
Hon BILL ENGLISH 
: I think we can certainly achieve transparency around the rebuilding of Christchurch to show what public money is being spent and where it comes from. That should not be difficult at all. 
Metiria Turei 
: Who does the Minister think should fairly bear the cost of this disaster: those who can afford to and who have said publicly and openly that they want to or those who are receiving Government support like Working for Families? 
Hon BILL ENGLISH 
: That will depend to some extent on the decisions we make but by and large one can expect the Government to stick to the method it has used through the recession when Government spending has been tight. We will continue to protect the vulnerable to maintain front-line services and to continue with long-term investment in infrastructure so that we can have a stronger growing economy. In the longer run a stronger growing economy will help the rebuilding of Christchurch and the reinvigoration of the rest of the country more than any particular spending or taxing measure will.