Norman Russel William: Questions for Oral Answer — Questions to Ministers Questions to Members 
Norman Russel William: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Volume:675;Page:20966] 
1. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: What is the cost impact for the Earthquake Commission following Friday’s High Court decision and what now is the total cost to the Crown of the Canterbury earthquakes? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 We do not yet know the impact of the High Court decision but the judgment would be likely to shift some of the costs from private insurers towards the Earthquake Commission so there are likely to be extra costs for the Government. The important thing is that the judgment does not affect Canterbury residents as their claims will still be met. The total cost to the Crown of the earthquakes including the increased Earthquake Commission liability estimate issued last week is currently around $12.9 billion. That excludes any impact from the court decision. 
Dr Russel Norman 
: Does he recall telling this House on 16 June this year that had the costs of the earthquake been larger raising an earthquake levy was something he could have looked at and given that the costs are now in the order of $13 billion or possibly $14 billion will he now look at it? 
Hon BILL ENGLISH 
: I would distinguish between two sorts of costs to the Government. One is the general Government contribution for instance to the purchase of homes in the red zone. Those costs are over and above any insurance claims and they are being financed by borrowing because that spreads the cost across all taxpayers. The insurance-related costs which are the costs that are now looking significantly larger have always been financed by the Earthquake Commission levy. It is of course possible that in the future those levies will increase because any increase in insurance costs should fall on those who benefit from it and that means the insured party. 
Dr Russel Norman 
: Does he accept that his decision not to raise an earthquake levy will overall lead to greater levels of Government debt? 
Hon BILL ENGLISH 
: Any Government at any time has the opportunity to put up taxes which is what the earthquake levy would be. The Government made the decision which it stands by that an increase in taxes at the time of a significant earthquake and a recession would not have been helpful for the economy. 
Dr Russel Norman 
: Does he agree with the AA Insurance head of corporate affairs Suzanne Walton who recently said that in light of the earthquake cost blowout the Government might have to seriously look at the Green Party’s proposal to restock the emergency fund through a levy? 
Hon BILL ENGLISH 
: I go back to distinguishing between different costs. The general contribution of the Government to the earthquake recovery is funded through debt. That cost is therefore spread across all New Zealanders. Costs related to insurance in the Government’s view should fall on those who are insured. Now that the Earthquake Commission fund is likely to be cleaned out of course it is quite possible that Earthquake Commission levies will be considerably higher and those would be borne by homeowners. 
Dr Russel Norman 
: Is he aware that the Christchurch City Council is raising a 1.76 percent earthquake levy on ratepayers and is it not a cruel paradox that the very people least able to pay a levy—the ratepayers of Christchurch—will have to pay one when the rest of us will not? 
Hon BILL ENGLISH 
: The rest of us are contributing. There is a Government fund of $5.5 billion and all of that $5.5 billion will ultimately be met by the taxpayer. The Government is working closely with the Christchurch City Council to look at how to achieve fair sharing of the costs between the council and the Government. We will continue those discussions because decisions have not been made but certainly part of our consideration is the ability of Christchurch ratepayers to pay. 
Hon John Boscawen 
: Would the Government be more or less able to fund the earthquake recovery if Government spending as a proportion of GDP had been reduced to 29 percent—2005 levels—over the last three Budgets as ACT proposed last month? 
Hon BILL ENGLISH 
: We would be more able to pay. 
Hon John Boscawen 
: How many more billion-dollar increases in the cost of rebuilding Christchurch will it take for this Government to realise the need to reduce Government spending as a proportion of GDP to avoid New Zealand becoming the next Greece Ireland or Portugal? 
Hon BILL ENGLISH 
: We would hope there are not too many more multibillion-dollar additional costs of the earthquake. The Government has been working to strike a balance between getting New Zealand in shape to deal with external shocks on the one hand which means controlling our debt and getting our deficits down and on the other hand meeting the very real costs of the earthquake and the recession and to the extent it is possible protecting the most vulnerable through that period.