Norman Russel: Questions for Oral Answer — Questions to Ministers 
Text is incorporated into the Bound Volume 
Norman Russel: Questions for Oral Answer — Questions to Ministers 
[Sitting date: 09 May 2012. Volume:679;Page:2076. Text is incorporated into the Bound Volume.] 
4. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: How much has been raised to date by the Earthquake Kiwi Bonds and at this rate how many years will it take to cover the Government’s estimated $5.5 billion liability resulting from the Canterbury earthquakes? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 To date $26.4 million has been raised by Earthquake Kiwi Bonds but I point out to the member that it was never the Government’s intention to rely only on Earthquake Kiwi Bonds to pay for our share of the earthquake costs. The Government borrows as is required as part of its broader borrowing programme to meet the commitments it has already made of $5.5 billion to the rebuild of Christchurch. We are not going to have difficulty financing that commitment. 
Dr Russel Norman 
: Can he confirm that given that his earthquake bonds scheme has raised $26 million in about a year at this rate it would take about 200 years to raise sufficient funds to pay for the rebuilding of Christchurch? 
Hon BILL ENGLISH 
: I probably could confirm that if it is mathematically correct; it is just that it is irrelevant to financing our commitment to Canterbury. The Government has made a very firm commitment of $5.5 billion plus its obligations under the Earthquake Commission. We have the capacity to finance that as and when required. The hold-ups and challenges in Christchurch are not to do with finance; they are actually to do with the complexity of resolving insurance issues. 
Dr Russel Norman 
: Would it not make more sense to strike an earthquake levy which would have raised about $1 billion so far in the first year of operation which would pay for the total Government share of $5.5 billion in 5 to 6 years? 
Hon BILL ENGLISH 
: The answer to that is no. We did treble the Earthquake Commission levy to channel some of the extra costs of insurance through to homeowners so they understand that that is what is going to happen. But we decided as discussed at the time that incorporating the funding of the Canterbury earthquake in our general borrowing programme was the right thing to do at a time when the economy was struggling to get on its feet and we did not want to hit it with more taxes and levies. 
Dr Russel Norman 
: In light of his earlier discussion about the importance of protecting the fiscal position of the Government does he acknowledge that a temporary earthquake levy raising about a billion dollars a year would mean that the Government’s fiscal position would be much healthier than it is currently? 
Hon BILL ENGLISH 
: Of course that was an option but we have struck I think the right balance in terms of getting back to surplus between reorganising our tax system so that it does yield more revenue by plugging loopholes and improving incentives on the one hand and containing expenditure on the other hand. You can solve any fiscal problem just by pushing taxes up but when you are trying to get the economy growing to provide jobs and higher incomes we decided that putting more taxes on it was the wrong thing to do. 
Dr Russel Norman 
: Well given the fiscal trouble that the Government now finds itself in will he re-examine the quality of some of the Government’s spending in particular the $14 billion on new motorways that it is proposing to spend the $2.3 billion on subsidies for emissions trading scheme polluters the $400 million on subsidies for irrigation and the $1.1 billion—and counting—from the 2010 tax cuts largely going to upper-income earners? 
Hon BILL ENGLISH 
: The member is wrong about the tax cuts so we will not be re-examining that. Secondly I am pleased he has drawn attention to our extensive infrastructure investment programme in roads. In fact it is a feature of this Government’s management which is almost unique—that is despite the recession we have carried on with the infrastructure investment required to support a growing economy and that somewhat significant number of New Zealanders who still drive cars. 
Dr Russel Norman 
: Is he aware that the Christchurch City Council is under pressure to sell the city’s assets to pay for the rebuilding of Christchurch and does he think it is fair to ask a city that has been recently devastated by two earthquakes to sell its assets rather than the Government raising a national temporary earthquake levy? 
Hon BILL ENGLISH 
: That is really a matter for the city council. It has got financial obligations it needs to meet and choices about how to do it. I might say that New Zealand as a whole is in this situation where meeting the cost of among other things the earthquake means that we are trying to avoid high levels of debt. We are actually looking at partial sales of some Government assets which would help us through a difficult situation. 
Dr Russel Norman 
: Is the Minister confident he has made the right fiscal decision given that his Earthquake Kiwi Bonds have raised $26 million in the first year whereas an earthquake levy would have raised $1 billion and does he acknowledge that that one decision has added significantly to the amount that the Government has to borrow? 
Hon BILL ENGLISH 
: Yes and yes. We think those decisions strike the right balance between dealing with the large demands on our expenditure caused by the earthquakes at a time when the economy was in recession and hitting it with more taxes would have made it more difficult to get the new jobs investment and growth that we are all looking for.