Government committed to rebuild Canterbury

Tuesday 1st March 2011

The Government has reaffirmed its commitment to provide the financial resources needed to rebuild the Christchurch and the Canterbury economy, Finance Minister Bill English said.

"The earthquake has clearly dealt a considerable human and economic blow to Canterbury, and this will have a significant impact on the Government's finances and the wider New Zealand economy. Its effects will be felt for some years to come," English said.

The Treasury has provided a preliminary assessment on the earthquake's cost and economic impact putting the total cost of the damage at around two or three times the $5 billion estimate of the September 4 quake, including private insurance and Government costs.

Additional economic costs are set to come from the loss of output from the region and lower tax revenues.

At a national level, economic growth over the first half of 2011 is also expected to be lower than forecast.

"Financially, New Zealand is well covered for disasters by world standards - through the Earthquake Commission disaster fund, the Government's own finances and ability to borrow, and through insurance companies and their own global reinsurance arrangements," English said.

He also said the earthquake has made it more important that the Government presses ahead with policies to build a faster growing economy based on savings and exports - and to reduce New Zealand's reliance on foreign borrowing.

"In particular, it's essential that we continue working to get the Government's finances in order, so money is freed up for Canterbury and so that we don't build up debt that is a drag on growth and is a burden for future generations."

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