2. Earthquakes—Economic Impact of Kaikōura Earthquake and Lessons from CanterburyANDREW BAYLY (National—Hunua) to the Minister of FinanceEarthquakes—Economic Impact of Kaikōura Earthquake and Lessons from Canterbury2. ANDREW BAYLY (National—Hunua) to the Minister of Finance: What reports has he received on the expected impact of the Kaikōura earthquake on gross domestic product?Hon BILL ENGLISH (Minister of Finance): In the short term the earthquake is clearly having a major impact on the economies of Kaikōura and surrounding areas. But in contrast to the Christchurch earthquake the impact looks to be relatively localised. The upper South Island region which includes Tasman Nelson Marlborough and the West Coast makes up 3.5 percent of New Zealand's economy or $8.3 billion in regional gross domestic product. By comparison Canterbury's GDP was $33 billion and Wellington's $32 billion. The ANZ and BNZ are predicting a small dint in economic activity in the final part of this quarter and the first quarter of next year. The preliminary advice I have received suggests that this could be about right.Andrew Bayly: What lessons have been learnt from the Christchurch earthquakes?Hon BILL ENGLISH: As the Prime Minister said yesterday they are two different events presenting different challenges. One of the biggest lessons from Christchurch is how resilient and adaptable New Zealanders and New Zealand businesses are. Despite the devastation caused by those earthquakes the impact on GDP was less than many expected if only because businesses whose premises were destroyed found other premises to operate out of employing their staff and meeting the needs of their customers. That is why we are doing everything we can in the coming months to assist businesses to keep going and to weather the immediate impact of the quake.Andrew Bayly: What effect will the Kaikōura earthquake have on the Government's future investment plans?Hon BILL ENGLISH: We are obviously going to have to invest significant sums of money in things that just a week ago we did not anticipate. It will take some time to get a clearer picture of the impact of the earthquake on the Government's overall investment programme. Ideally we would be able to continue with all other investments at the same time as incurring the cost of fixing the damage. We may be able to do that because we have got a growing economy the Government's books are in good shape and domestic and international confidence in New Zealand remain high. We will get the opportunity to consider these issues both in the context of the half-year update due in about a month and then in Budget 2017.Andrew Bayly: What other lessons have been learnt from recent unexpected events?Hon BILL ENGLISH: I think the principal lesson is simply the vulnerability of New Zealand to natural disasters even if we have got better at being resilient to international economic shocks. The Government is actually just tipping over $17 billion of expenditure in the rebuild of Christchurch—a significantly higher amount than we anticipated at the time of the earthquakes—but because of good reasonable fiscal constraint we have been able to hold relatively low levels of debt and debt is now just beginning to drop. So the reason we are able to repair the damage caused by this earthquake is general fiscal prudence across the public services but also the cost of repairing Christchurch has been well managed particularly by my colleague Gerry Brownlee the Minister in charge of the Christchurch earthquake.