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$3 Billion

Written By: - Date published: 6:47 pm, July 31st, 2012 - 21 comments
Categories: debt / deficit, disaster - Tags: ,

The government unveiled their blueprint for Christchurch last night – beautifully in time for the 6 o’clock news, making it difficult for the media to organise covering the protests outside as they covered the story inside.  3 land owners who were positive about the plan were put up earlier to brief the media – those less positive, like Richard Peebles were still taking it in.

But in the TV coverage they were able to reveal that the government still has $3 billion on standby to purchase large amounts of land around the CBD.  $3 billion left out of the $5.5 billion that had been allocated to the rebuild.

That’s more than half the money spent while 30,000 people are desperate for housing.

That’s half the $6 billion Bill English ‘guesses’ we’ll get for Asset Sales (we’ll see if we get that much, particularly after costs & incentives…).

Are we selling off the family silver to buy a green strip around Christchurch?

Realistically we’re a low government debt (high personal debt…) country, we could fund proper housing and a green strip around Christchurch through a little extra debt and fix the structural deficit with a CGT, but this sends a terrible message about this government’s priorities.

I’m all for taking advantage of the rebuild to make Christchurch the world’s most liveable city, but this just shows National’s ideology up.

Even more so when they’re already pushing Christchurch City Council to sell their assets to pay for their share of the government’s grand plan – convention centre and all.

And if Christchurch are getting a big convention centre without socially-disastrous pokies, surely we should scrap the Auckland one?  Unless they want us to compete: cutting each other’s throats and wages to foreign corporates’ advantage like we do with our ports…

21 comments on “$3 Billion”

  1. Herodotus 1

    Bunji – you like many others believe that a CGT is the savor of this country. “round Christchurch through a little extra debt and fix the structural deficit with a CGT” you are misguided at best. The CGT that Labour were promoting (without any details because Labour had None!!) at the last election had more holes than swiss cheese.
    How can so many here on one hand decry that housing is over price (Which I agree) and then on the other hand expect to gain so much extra tax from this over priced housing to increase even more (which I question how property can increase given the macro environment that underpin NZ) ??
    http://www.interest.co.nz/property/54374/labour-run-capital-gains-tax-39-top-income-tax-rate-gst-fresh-fruit-and-vegetables-ta
    http://www.scoop.co.nz/stories/PO1107/S00170/labour-is-history-not-economists.htm
    Or have I missed something on how a CGT could fund this ?

    • Draco T Bastard 1.1

      (without any details because Labour had None!!)

      Actually, they did. If they didn’t you wouldn’t be able to say the next bit had more holes than swiss cheese.

      • Herodotus 1.1.1

        I was referring to that there was to be post election “An expert’s panel would advise on the final design of the system, ”
        Yet there were already exemptions specified e.g. those poor blue collar family trusts that hold a bach/crib “The family bach would be caught by the tax, but only if it was sold. If it was handed down, no CGT would be paid.” Thus giving anyone with some sense to sell the crib to a family member at inflated/market price then selling to a 3rd party exempting themselves from paying any tax.
        So even Labour promoting a policy it did not have the system worked out, yet were able to produce what tax was to be collected !!!
        http://www.stuff.co.nz/dominion-post/news/politics/5284934/Labour-reveals-its-capital-gains-tax-policy
        So tell me how Bunji is to fund his commitments by following a 2011 election pledge and how he/NZ is to fund this whilst we wait to collect this windfall?

        • McFlock 1.1.1.1

          Interesting. 
          “Sold to a family member” doesn’t mean “sold”? How does Australia deal with this denotational conundrum?
           

          • Herodotus 1.1.1.1.1

            Just following from the comment that was linked. There are some very smart accountants and lawyers that are paid extremely well to “protect” their clients. That is partially why the super rich increase their wealth at a far greater rate than you or I.
            So why were such exemptions catered for in the release of the policy? And I agree totally with you in that your example does mean SOLD !!!!!
            But I am digressing- I was wondering how Bunji was to fund this idea of his?
            Also why the insurance boys are not paying up on those in need. Should you or I miss a payment or 2 on our insurance they do not pay up, yet when an event that we are insured for happens that it could take over 5 yrs to be paid out
            http://www.rebuildchristchurch.co.nz/blog/2012/7/3news-co-nz-insurers-deny-dragging-feet-in-canterbury

            • McFlock 1.1.1.1.1.1

              So why were such exemptions catered for in the release of the policy? And I agree totally with you in that your example does mean SOLD !!!!!

               

              Actually, Australia has an exemption for death where the bequest is not taxed, but the property is valued at market rates at time of handover for if the inheritors subsequently sell (if I read my link correctly).
                   
              Doesn’t seem to hurt them too much. But then the semantics would be sorted out by the expert panel mentioned in your link. And loopholes that are subsequently found could be addressed as and when they come to prominence. 
                       
              Your protests of “full of holes” seem a bit highly strung. 
                   
              Agree about insurance companies, though. Same breed as bankers and exchange dealers.

        • Lanthanide 1.1.1.2

          Better that a political party say they will get an expert panel to formulate their policy post-election, compared to National who just blunder on through with their financial plans that don’t make sense which have been roundly criticised by almost all financial commentators.

        • Frank Macskasy 1.1.1.3

          “Yet there were already exemptions specified e.g. those poor blue collar family trusts that hold a bach/crib “The family bach would be caught by the tax, but only if it was sold. If it was handed down, no CGT would be paid.” Thus giving anyone with some sense to sell the crib to a family member at inflated/market price then selling to a 3rd party exempting themselves from paying any tax.
          So even Labour promoting a policy it did not have the system worked out, yet were able to produce what tax was to be collected !!!”

          Herodotus – what you’re describing is a tax-dodge.

          What do you think governments do with tax dodges? They close them down.

          So your “swiss cheese” argument is, well… it’s full of holes.

        • Draco T Bastard 1.1.1.4

          I didn’t say that it was a good policy but they did have details.

  2. Augustus 2

    I’d been wondering how they were going to get around the $100k limit for land value from EQC for high value properties.
    Eureka! We buy them out for a green strip. Sheer genius.

    • Herodotus 2.1

      http://www.nbr.co.nz/article/christchurch-properties-earmarked-acquisition-–-doubts-raised-ch-124760
      “Prices will be based on market values at the date the land is acquired rather than on rateable valuations, which was the formula used for residential red-zoned properties” Not sure how this can be manipulated to help those high value properties. Given past experiences when MOE acquired land I had some connection with. The added cost that had been incurred regarding obtaining consents were not taken into consideration as to the value attached to the land. SHould be a test for valuers to work out market value with no sales history !!!!

  3. fabregas4 3

    What ever happened to the donations (including my family and school community) made? I had imagined this would be used for folks in need. – not a convention centre and stadium for the rich.

  4. Steve 4

    yes it was…lovely…. the choreography on-top of the questionable geography…on-top of the still functioning geology. Warwick Issac the demolition guy has replaced the high vis vest and blue hard hat, for a sensible CERA (Ballentynes?)grey suit, he’s now putting it all back together. Like those blocks that roll backwards in the psychology experiment or the film run backwards as described in Slaughterhouse Five. Even more brilliant was good old Pete Townsend, who thinks we could have the best city in Australasia, although for a moment I thought I was back on old Manchester Street walking out of the new life church, incidentally, an old picture theatre, oh the rapture, he’s actually planning to live in the “new CDB” he’s so excited, by the new vision: the new vision…. a “blue print” that means “working drawings”, from a couple of centuries ago. Folks drew up boats, on blue paper in the 1800’s, but as with most things, now replaced by faster means and differing colours. The million dollar cost of the blue print included CGG as we flew overhead the new vision on the sex news with peter and psymon and blonde dolly, that’s not a blue print—that is a computer file. The covered stadium, looked like a Portuguese man of War, washed up on some hapless beach. Someone in the room piped up “who is going to keep that clean”…”how will the grass grow”..the shiny roof reflected sun rays thru and back, right to the CORE vision. Why, a blue print? We know it’s sad, but don’t you mean “Christchurch, Hard Disc Dreams”. We have all played Sim City, in that CGI world you make your own city with slim resources, pipes and water. You can even manage your emergency precinct. It was always not working when the fire, hospital, police and justice were all placed in the same precinct…hell yeah, when that CG earthquake rolled thru the game, all the roads broke, fires broke out and all services were caught in the Avon Loop. Terrible idea, look at Manukau, the cop station is right over the road from the Court, right beside Rainbows End.

  5. aerobubble 5

    weird radio interview, a business representative, in reply to the
    argument that productivity and wages are related so minimum
    wages should increase, counted that even the kids of the rich
    would get paid more when earning minimum wage. #!@#@@

    This when most managers argue they’ve
    earn their high bonuses despite not returning a stable national
    economy, without the necessary productivity growth!!!

    Is NZ business lobby deluded?? Do they continue to produce
    neo-liberal dogma, or what, off the cuff. Its a basic
    fact that higher wages nations increases demand and so grows
    the economy through multipliers, but lower wage nations where a
    few take huge bonuses
    actively reduces demand and the buying power of the masses.

    Chch new plan. Top down, super rushed committee, has put business
    before people. Sorry, but aren’t all great cities led by the people,
    how the people move through, how the people demand, builds the living
    city. That profit driven decisions are arse backwards, because
    say we over charge so much for seats in mega domes sport arenas, that
    somehow mega sports arenas ‘are’ us as a community. That because
    we are over charged, under paid, we somehow consent to our being
    over charged and under paid, and so consent to more of the same??

    Now don’t me wrong, I don’t want a top down socialist solution
    either, I would like a rational basis for ChCh rebuild. That
    ChCh re-building goes where the people are now, how the people
    are now, how the people demand now, how the people build the
    city now, despite all the calamity around them. That the central
    district should not be rewarded for producing so many shoddy
    buildings, that the same council processes that led to the CTV
    building collapse, even the same owners taking the cheapest
    design they could buy from the shameless building designers…

    ChCh rebuild plan, denies CHCh the opportunity to integrate
    the earthquake into itself. Do cities have rights like people,
    to grow organically and in response to their surroundings and
    their set backs?

    The Chch plan, is like the NZ plan, the reality of kiwis living
    in NZ is ignored, and a few get to play God, take charge.

    If the CBD wants the cash to rebuild, surely it should build
    cycleway, tram lines, light rail, to bring the passing trade
    and then, and only then has it justification for building
    and investing in public goods, like council and government
    under written stadiums. Its summed up for me, by a owner
    rebuilding of a heritage building only to find out it needs
    to be demolished as the high almighty have designed a new
    solution. where’s the invisible hand, where’s the market
    solutions (people demand), where’s the people’s city?

    This problem goes to the heart of the global crisis, a lot
    of balding fat men in committees seizing the invisible hand
    of the market as theirs, and then crushing that very hand.

    Markets are made from the masses of people, not some
    propaganda piece from a few media outlets choosing who gets
    to manufacture the consent. What’s wrong with CHCh becoming
    a number of towns for a few decades, and then growing a center,
    what’s the rush, I mean CHCh growth spread out over decades
    is better for all?
    i.e. should ChCh grow exponentially or organically?
    The plan on the table suggest a burst of activity that will create
    a ‘developer’ designed CBD while the people of CHCh have
    little say, since their collective effort, their habits, their
    needs, their demands, are dictated to them.

    And to another crisis of mismanagement, the housing sector,
    rewarding property speculators with tax free capital gains.
    Someone proposed a warranty for homes, why not, some
    naysayer suggested that home buyers did not have perfect knowledge
    about the homes they buy so would still be conned into taking
    the cheapest home package, and that builders like him who do
    a great job would not only be charging more for the warrenty
    but also be under cut by the cowboys. which is arse backwards,
    since it assumes that he isn’t a cowboy!! That NZ builders
    have perfect knowledge, leaky homes anyone!!! Like so many
    investment companies, big business elites who think bonuses
    work for the top end of town but not the bottom tail of society.
    when I buy a electronics device I get a instruction book.
    But when I buy a home, there’s nothing. How do you best care for
    your roof, or your timber framing home???? Sorry but our
    nation is designed by developers, for developers, and of developers
    only democracy, and why? because developers take their tax free
    representation to the bank, again and again, and then politicians
    declare that developers are making all the money despite decade
    on decade statistic showing we are failing to grow as much as
    we should, get the high wages our educated should be seeing…

    A CGT might won’t stop bubbles, or fraud, but at least when we
    do get bubbles they will be much much bigger, and when we do
    get fraud there will be masses more losses. Who said there
    wasn’t some silver lining in the low wage, damp leaky homes,
    poor investment opportunity economy, that it could have been
    so much worse, that we now are benefiting because we weren’t
    able to use neo-liberalism to decimate the NZ economy,
    despite all the trying of the business and media elites.
    There’s the core rub surely, that our home grown neo-liberals
    aren’t just stupid like all neo-liberals, they just more
    incapable than the average global neo-liberal. Stupid
    twats, they have to build a world class economy before they
    can trash it with their moronic economic visions.

    welcome to Nz, where bad governance is equally matched by its incapable
    weak uber neo-liberals. Is that why we accept Key’s far right policies,
    because he’s so damn pathetic it keeps us from harming ourselves
    overly. NZ the corp-pocracy.

  6. AmaKiwi 6

    Screw the people . . . again.
     
    People need housing, not public monuments which can only be built by large construction companies (i.e., wealthy companies).
     
    The poor pay the taxes and live in the streets.  The wealthy take the tax money to build non-essential public monuments.
     
    People of Christchurch, take to the streets!  Block all downtown construction until the government provides you with homes.  Stand in front of the bulldozers.

  7. Carol 7

    And it seems that selling Christchurch assets are on the table for funding Gerry’s manic plan:

    http://www.parliament.nz/en-NZ/PB/Business/QOA/0/6/2/50HansQ_20120801_00000006-6-Christchurch-Recovery-Potential-for-Sale.htm

    http://www.radionz.co.nz/news/canterbury-earthquake/112137/brownlee-admits-he-received-advice-on-christchurch-asset-sales

    The Canterbury Earthquake Recovery Minister has been forced to concede he has received official advice on Christchurch City Council selling some of its assets to help pay for rebuilding the city.

    Gerry Brownlee has also indicated he supports the idea of selling the assets, saying the council has built up a strong set of books to provide for a rainy day.

    Mr Brownlee initially skirted around a parliamentary question from Green MP Eugenie Sage about whether he had received advice on the potential sale of council assets.

    But after being forced to concede he had, he then went on to suggest there would be discussions with the council about the matter.

    [SIGH] when will this nightmare of a government end?

    • Draco T Bastard 7.1

      And it seems that selling Christchurch assets are on the table for funding Gerry’s manic plan:

      That was always going to be the case. The question that needs to be asked is Why aren’t the insurance companies paying for it? That is, after all, why insurance exists.

      The Canterbury Earthquake Recovery Minister has been forced to concede he has received official advice on Christchurch City Council selling some of its assets to help pay for rebuilding the city.

      Those officials need to be fired for being too stupid to do their job with any competence.

      • ropata 7.1.1

        the earthquake was a bonanza for landlords with overvalued shitty old buildings in the CBD
        they don’t care about rebuilding; they took the money and pissed off to the GC
        (the skilled workforce was gravitating west towards the tech hub / university anyway)

        Bob Jones writes in the NZ Listener:

        Cities have many components – libraries, art galleries, council offices, theatres, halls and other public facilities. These comprise the indulgent element, paid for from the public purse. But they cannot exist in isolation and alone constitute a city. Rather, they emanate from the steady organic growth of a city centre’s commercial activities in the form of shops and offices. Christchurch’s retail heart was clearly in trouble, with empty shops abounding, while the remainder lived off office workers, who are now gone. The emergence of large suburban shopping centres killed off the CBD as a retail location, as has occurred in many cities throughout the Western world. New Zealand examples include Lower Hutt and, increasingly, Hamilton.

        For most CBD building owners, the devastation has proven a windfall. They have taken their insurance money and sensibly reinvested it in Auckland and Australia, as real-estate agents will readily confirm. Who can blame them?

        Furthermore, if the anecdotal evidence is accepted, most have received payouts based on replacement costs, which have been far in excess of their now-demolished buildings’ former market value. Earthquake Recovery Minister Gerry Brownlee expressed concern at this capital flight in mid-April, but the owners are simply acting rationally. The rebuilding of Europe’s bomb destroyed cities after World War II took two decades, but even then it was only possible because those cities had sizeable populations, which meant an instant market for new offices and shops. That is not the case in Christchurch, aside from the financing and insuring difficulties.

  8. AmaKiwi 8

    Are any of you from Christchurch?

    I am not and am not intimately acquainted with the details of this earthquake fiasco.

    Are there any community organizers working the streets of Christchurch? They would be the ones to help people organize protests for housing and the needs of the people (as opposed to the needs of the rich and their politicians).

    If you are from Christchurch and know of community leaders and organizers working with the citizens, please post here information about how we can help.

    It is one issue nationwide: Centralize decisions in the hands of the Parliamentary Dictatorship. Ignore the needs of the people but make sure the wealthy are secure. Raise regressive taxes on the masses. Cut taxes for the wealthy. Cut jobs, especially for workers and the middle class.

    Christchurch, your problems are the same as ours but the Dictatorship’s failure in your city is in the media spotlight and more graphic. If we can help you, you might start to turn the tide and thereby help all New Zealanders.

  9. Kevyn Miller 9

    If a catastrophic natural disaster of this scale (per capita) was to happen in Australia, USA, Canada, Japan, Taiwan, Italy, France or Germany their laws would compel federal/state governments to pay for almost the entire replacement cost for public buildings and infrastructure so that their would be a 50/50 cost split between taxpayers and ratepayers per capita. New Zealand law leaves it to the discretion of Cabinet whether to pay more than 60% of the costs. Since there are 20 taxpayers for Christchurch ratepayer that 60/40 split is costing ratepayers over $10,000 (GST inclusive), Canterburys insurers $4.5 in GST and costing non-Canterbury taxpayers just a few hundred dollars. Using that $3bn the way it would be in civilised countries would avoid sinking the City and its ratepayers in an ocean of debt at no cost to other taxpayers.

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  • Wellington business relief package needs flexibility
    The Government’s Wellington business support package is welcome news but needs to be implemented so that all affected businesses get the help they need, says Labour MP for Wellington Central Grant Robertson. “Wellington businesses will be pleased that the Government ...
    1 week ago
  • EQC’s staff cuts show disregard for quake victims
    The Earthquake Commission’s stubborn insistence on slashing its workforce and its operational funding by nearly half shows callous disregard for victims of the Kaikoura earthquake and the thousands of Cantabrians still waiting to resolve claims, says Labour’s Canterbury spokesperson Megan ...
    1 week ago
  • Maori Land Court job losses must be delayed
    Māori Development Minister Te Ururoa Flavell must request that pending job losses at the Māori Land Court are put on hold until the Māori land reform process is resolved and the risk of losing centuries of collective institutional knowledge is ...
    1 week ago
  • Financial support needed for urgent earthquake strengthening
    The Government must provide urgent support to residents for important earthquake strengthening work so that it happens quickly, says Grant Robertson, Wellington Central MP.  "I support the call from Wellington Mayor Justin Lester to bring forward work to strengthen the ...
    2 weeks ago
  • Labour welcomes equal pay
    Labour has long appreciated the value of women’s work and welcomes the Government’s decision to address pay equity for women, say’s Labour’s associate Workplace Relations and Safety spokesperson Sue Moroney. ...
    2 weeks ago
  • Surgeons’ letter a damning indictment
    A letter from Waikato Hospital’s orthopaedic surgeons claiming that hospital managers are stopping them from making follow-up checks on patients is a damning indictment of the health system, says Labour’s Health spokesperson Annette King.  “It’s terrifying that one woman’s elective ...
    2 weeks ago
  • Out of touch Nats continue state house sell-off
    The Government should be focused on building houses for families to buy and more state houses for families in need, not flogging them off, says Leader of the Opposition Andrew Little. “National’s state house sell-off does nothing to help people ...
    2 weeks ago
  • Joyce drags feet while Capital businesses suffer
     Wellington businesses affected by the earthquake are continuing to struggle while the Government drags its feet on getting a business assistance package up and running, says Grant Robertson, Wellington Central MP.  “Steven Joyce needs to front up with an assistance ...
    2 weeks ago
  • Health and Safety Act fails to reduce work fatalities
    After the Pike River tragedy, New Zealanders realised that workplace health and safety culture needed to change. Last Saturday marked the 6th anniversary of the tragedy that killed 29 miners at the Pike River mine on the West Coast of ...
    GreensBy Denise Roche
    2 weeks ago
  • What is the point of education?
    The proposed Education (Update) Bill is the Government’s statement about what the point of education is, and what it means to people. This week we had a day of Select Committee hearings in Auckland on the Bill. It’s a huge ...
    GreensBy Catherine Delahunty
    2 weeks ago
  • Earthquake exposes training shortfall
    Kaikoura’s earthquakes have exposed the Government’s under investment in critical building and construction skills training, says Labour’s Building and Construction spokesperson Phil Twyford. “The Government needs to urgently ramp up the training of Kiwis in construction and engineering in the ...
    2 weeks ago
  • More cops needed to get P off our streets
    National’s cuts to Police funding and drug enforcement officers has seen a surge in cheap P on our streets, says Labour’s Police spokesperson Stuart Nash. ...
    2 weeks ago
  • Who’s calling the shots? Bye bye surplus
    I would love to know who is calling the shots in the National government’s cabinet when it comes to deciding how best to spend taxpayers’ money.  On the evidence of the last few weeks, it definitely isn’t Finance Minister Bill ...
    GreensBy David Clendon
    2 weeks ago
  • Urgent rethink needed on workplace safety
      An urgent rethink is needed on the Government’s new workplace safety laws with the number of deaths this year already at the same level as at the same time in the 2015 calendar year, says Labour’s Associate Workplace Safety ...
    2 weeks ago
  • Rubble and rubbish: spending time in post-quake Kaikōura
    I visited Kaikoura over the weekend – basically to see how the community was coping with all the rubbish and rubble created by last week’s 7.8 magnitude earthquake, and to see my brother Rob. I may have mentioned before that ...
    GreensBy Denise Roche
    2 weeks ago
  • Time to pull the plug on state house sell-off
    The collapse of the planned sell-off of state houses in Horowhenua is an opportunity for the Government to call time on its troubled state house sell off policy, says Labour’s housing spokesperson Phil Twyford. ...
    2 weeks ago
  • Treasury sounds warning bell – but National’s not listening
    Today's long term fiscal outlook issued by The Treasury is a welcome wake-up call on the need to dramatically improve and diversify our economy and properly plan for the future, Grant Robertson, Labour’s Finance Spokesperson says. “Through our Future of Work ...
    2 weeks ago