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Christchurch – economic hindrance?

Written By: - Date published: 2:15 pm, May 25th, 2012 - 16 comments
Categories: jobs, john key - Tags: , , ,

The Government have been pushing a line that Christchurch is holding us back as an economy.  The poor people of Christchurch are to blame for all our woes apparently, with their earthquake.  We shouldn’t blame National, just Cantabrians.

But it’s not true.

Since the earthquake Canterbury has been our main source of economic growth.  This is not surprising – it’s a classic case of how GDP fails as a measure of success.  All those broken lives and buildings need… rebuilding.  That costs money, that means spending, that means GDP growth.

If it wasn’t for Canterbury the Government’s GDP record – 0.5%/year, the worst growth for any government in over 75 years – would be noticeably worse.

And indeed John Key is now citing this as to why the economy is going to be as rosy as Treasury’s figures – even though most economists think this is ‘at the top end’ of possibilities, and every forecast so far by this government has been wildly over-optimistic.  He needs it to be of course, or his promised surplus won’t materialise.  You need to growth to get your surplus.

It’s yet another case of Key wanting it both ways: Christchurch is dragging us down, and Christchurch is our saviour.

Just like Labour’s saving allowed us tax cuts (for the rich), but Labour’s profligacy is what got us into such trouble (not the tax cuts).

It’s just not my fault, see?

16 comments on “Christchurch – economic hindrance?”

  1. tsmithfield 1

    “It’s yet another case of Key wanting it both ways: Christchurch is dragging us down, and Christchurch is our saviour.”

    Sorry Ben, but you haven’t really thought this through. Key can have it both ways.

    Firstly, the earthquake did damage a lot of the productive parts of the economy in the region, reducing tax take etc. The government has already poured a lot into the region in the region in terms of financial assistance. But not a lot of the rebuild has happened yet due to continuing aftershocks that have been slowing down the insurance companies (we just had another 5.2 quake 15 minutes ago BTW). So the quake has mainly been a handbrake on the economy up until now, and the economic benefits are still largely ahead.

    For instance, have a look at the various stages for Wigram Skies, one of the large subdivisions being developed in Christchurch at the moment. How many unsold sections can you find?

    All these sold sections represent houses that will be built on this subdivision over the next several years.

    • Colonial Viper 1.1

      Christchurch depopulating; disaster for most. Delays to serve the free market.

    • Shane Gallagher 1.2

      You must not be looking at the same data set that we are – and since it is from the RBNZ it can hardly be called biased… Chch has been contributing to the GDP of the entire country for every quarter apart from the two with the earthquakes. And this covers overall GDP so the point you make about productive sector is not relevant except to highlight how rubbish it is as an indicator.

    • Yep, the Chch rebuild is the only reason we’re not still in recession under current measures. John Key should be on his knees kissing the feet of passing Cantabrians, not whining that they’re dragging down the economy one minute and saying that the stimulus of repairing all this stuff will grow our economy the next.

      If we put the same effort into infrastructure projects during recessions as we did into the rebuild, our economy would be booming. :)

  2. Tom Gould 2

    Looks like these Tories led by that financial wizard Key, the money markets guru, are much worse at running an economy as the Greeks. Seems that the Greek net government debt to GDP has gone up by 65% since 2008 whereas New Zealand’s has gone up 120% since 2008. So instead of slagging off the Greeks, Key should get up there and ask them how come they did twice as well as he did in controlling debt.

    • True Freedom is Self-Governance 2.1

      Precisely, but people are still buying the lines and jumping on the “we dont want to become another Greece” bandwagon. I’m astounded every day by people claiming John Key is doing the right thing for the country because he knows what he’s doing financially. I like to ask them what proof they have of his financial nous and they can never answer aside from to mention his personal fortune.

      • Colonial Viper 2.1.1

        Investment banks caused Greece, John Key is an investment banker.

      • Colonial Viper 2.1.2

        John Key said we should be a financial centre like Ireland. Ireland is now a financial basket case.

  3. lefty 3

    Its partly true.

    Some Cantaburians are Nats

  4. ghostwhowalksnz 4

    The only budget item for Christchurch earthquakes is $90 mill for CERA. There may be smaller amounts in other budgets , eg Education for schools damage.

    But its nowhere near the ‘costs’ that English is continually claiming.

  5. Stop the bloody quakes please – then we can get on with the rebuild.
    There is a lot of money waiting to be spent in the Christchurch region.
    I understand NZ$12 billion from insurance is waiting to pay for rebuild.
    The Government has another NZ$9 billion ready.
    But until the shocks/aftershocks cease/slow to a small trickle, nobody can go anywhere.

    • Colonial Viper 5.1

      In other words, Christchurch, you are on indefinite hold. You also forget to mention the hold up not caused by the aftershocks – but by the private insurance companies.

      No wonder the city is depopulating.

      • Fortran 5.1.1

        Colonial

        Insurance is based on a basic premis – risk.
        The Insurance Industry is anticipated to pay NZ$12 billion for the quakes already. And more if new claims occur.
        The total New Zealand premium for all Fire & General insurance is something likje NZ$2 billion per annum, and that has to pay for everybodies anything insurance claims – even the car crash in Northland.
        Do you think that if we had State Insurance back it would make a difference ? – Risk is the factor and with further quakes it cannot be quantified.

        • Colonial Viper 5.1.1.1

          yep Christchurch your lives are all on hold, until the free market of overseas private sector insurers say so.

      • muzza 5.1.2

        Wonder how much the consultants. lawyers and general parasites are sucking out of the “cash funds”..

        Those “after shocks” are awfully convenient…

        Starting to wonder if Ch Ch is actually finished as a city, with the insurers dictating!

        Argh, but the insurers are going to lead in ways to “save the planet”, so thats all ok!

        • Treetop 5.1.2.1

          The insurance companies certainly dictate. Without knowing how long the unsettling earthquakes will continue for there has to be a better way of helping out those who no longer want to reside in Christchurch. This option has to be fast tracked by insurance companies as this would help to give all parties more certainty, (reducing the risk of another earthquake payout). The insurance companies are like the government holding onto as much Christchurch money as they can for as long as they can, as well as paying out as little as they can. The sad reality is that the earthquakes have had a high personal financial toll to everyone who owns property and that it is the insurers who are ripping them off. For some the earthquakes are bearable but being ripped off tens of thousands is harder to accept.

          Insuring property is all about the risk to profit that an insurer takes on. Landlords typically get as much rent as they can while paying out the least they can for property maintenance.

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    3 days ago
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    3 days ago
  • TPP casino signing gambles with our future
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    3 days ago
  • TPPA Still Needs an Independent Health Impact Assessment
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    3 days ago
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    3 days ago
  • Neo-Kalashnikovs join TPPA protest
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    3 days ago
  • Neo-Kalashnikovs join TPPA protest
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    3 days ago
  • Federated Farmers welcomes TPP signing
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