With Recovery Minister Roberston estimating that the 2023 storm recovery will be in the order of $13 billion to the state, this amount brings it close to the state contribution to the Christchurch earthquake rebuild.
Prime Minister Key noted at the time that Christchurch was “the largest and most complex, single economic project in New Zealand’s history.”
The Budget will also show that the estimated net fiscal cost of the earthquakes to the Crown will rise from around $13 billion at the half-year fiscal update last December to around $15 billion.”
The question Robertson as Minister of Finance has to answer is: what proportion of this will be paid by new debt, what proportion by reallocation of expenditure, and what proportion by special tax levies.
Jonathan Barret a tax professor at Victoria University Wellington, says do most of it with a one-off levy on the rich.
But the most relevant precedent for New Zealand is the flood levy raised by the Australian government in 2011 to help pay for the devastating Queensland floods.
For one year only, taxpayers with an annual income between A$50,000 and $100,000 paid an extra 0.5 per cent levy, while those earning over $100,000 paid an additional 1 per cent. Taxpayers living in the affected areas were exempt from the levy, which was designed to raise A$1.8 billion.”
The definition of “rich” tends to be “the payband just above mine”.
But Robertson should look to the multiple property owners and trusts where most of our wealth is kept. A one-off tax on the value of all trusts domiciled here, and if need be a one-off tax on the sale of every property captured by the Bright Line Test.
We can check the strength national solidarity after that’s done.
He has about one month left to land his budget 2023 draft.
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