REMEMBERING THE CHRISTCHURCH EARTHQUAKE



No words come close to conveying the horrendous scale and impact of the disaster that hit Christchurch last week. The earthquake will have a significant economic impact, but first it's important we take the time to remember those who lost their lives and the suffering of all those left behind. We can rebuild Christchurch and as a country we can absorb the economic damage of the earthquake, but we can't reverse the human toll. Read my Christchurch Earthquake Vigil speech here.

It is heartening that amongst all the loss and destruction there has been a remarkable level of resilience and a real outpouring of community spirit - neighbours have been helping neighbours and strangers have been rolling up their sleeves to help the needy. It is these acts of kindness that lift spirits and reassure us Christchurch has a bright future.

THE ECONOMIC IMPACTS 

Click here to watch my statement on YouTube



Based on the limited information available at this early stage, the Treasury has provided a preliminary assessment of the earthquake's cost and economic impact. According to that assessment, the total cost of the damage is likely to be two or three times the $5 billion estimated cost of the quake on 4 September last year, including private insurance and government costs.

In addition, there will be economic impacts, including:

• A loss of output from the Canterbury region and a delay in the reconstruction effort from the previous earthquake.
• Economic growth in the first half of 2011 will be lower than forecast.
• Government tax revenue will be lower than expected.
• The Government will bear extra costs to rebuild Christchurch.

You can read more about this in my media statement.

GOVERNMENT COMMITTED TO REBUILD

The earthquake has dealt a considerable blow to both the people of Canterbury and the national economy, but both are resilient. The Government is committed to providing the financial resources needed to rebuild Christchurch in both the short and longer term. Supporting and rebuilding Christchurch will be the most important thing the Government does this year and into the future. We won't be cutting corners.

Financially, New Zealand is well covered for disasters - through the Earthquake Commission and through insurance companies and their own global reinsurance. In addition we will pay for essential infrastructure, such as roads, water and sewerage systems, along with other necessary support by prioritising spending on Canterbury above other areas of government spending, and by taking on a bit more debt in the short term. We'll work through those issues over the coming weeks as we prepare for the Budget on 19 May.

IMMEDIATE ASSISTANCE FOR BUSINESSES AND WORKERS

Over the coming weeks and months the Government will be working to support the Christchurch economy. The Prime Minister has announced the first step - an initial six-week support package for businesses and workers. It is made up of two parts:

• An Earthquake Support Subsidy of $500 per week (gross) per full-time worker for businesses that have been disrupted to keep paying wages.
• Earthquake Job Loss Cover of $400 net per week for employees whose employer believes their business is no longer viable.

We have made the support package as simple and pragmatic as possible, so that it can be delivered quickly and reach the people who urgently need it. Over the next few weeks the Government will consider what measures will be needed in the medium-term.

THINGS TO LOOK OUT FOR

• 10 March, The Reserve Bank will issue its latest Official Cash Rate review and Monetary Policy Statement.
• 23 March, Statistics New Zealand will issue balance of payments data for the December quarter.
• 24 March, Statistics New Zealand will issue gross domestic product data for the December quarter.

Regards,
Hon Bill English
Finance Minister
www.billenglish.co.nz