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Govt must lead Chch rebuild

Written By: - Date published: 12:20 pm, March 1st, 2011 - 42 comments
Categories: disaster - Tags:

The government’s wage subsidy and universal redundancy for quake-affected workers is a start. But with 750 red-stickered buildings in the CBD alone and 200+ jobs already lost, it is just a start. The private sector won’t rebuild without demand, that will have to be supplied by the government upping its spending, and that needs to be paid for.

An earthquake levy that effectively reverses the tax cuts for the rich is needed. Key says that would hurt economic growth. What rot. How does Key pocketing at least $23,000 a year and Telecom’s Paul Reynolds pocketing more than $420,000 a year help the economy one jot? Does it encourage them to be more productive? Of course not. And besides, what economic growth? Even without the quake, NZIER says, growth would be just 1.3%, down from an earlier prediction of 2.3% and basically the same as population growth, due to the oil and food price shock we’re experiencing. With the quake too, growth will be just 0.3% this year and that will be entirely in the form of a one-off hit from the Rugby World Cup.

We can no longer plan to simply grow our way out of trouble. The rebuilding of Christchurch needs to be funded by tapping that enormous wealth transfer to the rich that National made with their tax cuts. No-one else has the money.

Instead, Bill English is proposing to hit Kiwi families worth even larger spending cuts, undermining public services that are already in trouble. He’s also planning to borrow more, which is interesting because a month ago we were being spun that we couldn’t borrow any more and had to sell assets. Doubtlessly, the extra debt taken on now will be used to scaremonger for asset sales at the election. All needless when the rich are sitting on hundreds of millions in new tax cuts.

Turning from funding the recovery to how it should be done-

Wage subsidies and universal redundancy – which National voted against last year and had just introduced for the quake-affected, albeit funded with public money – are good starts but Christchurch will really need a functioning economy to create jobs. The private sector will not lead this and, unfortunately, it appears the government is assuming it will. Sure, businesses will get insurance payouts but they won’t use the money to re-establish operations in Christchurch CBD if it’s a ghost-town, and every business that closes will have a domino effect. There needs to be a critical mass of economic activity, which the government can supply by taking on the rebuilding risk.

SOE Meridian is showing the way by commissioning a new building for its Christchurch call-centre despite its two existing sites being operational. This will mean more economic activity to create jobs, more office space for private businesses, and a replacement building setting the highest earthquake and energy-efficiency standards.

Housing New Zealand should undertake joint equity schemes with homeowners to ensure new homes are also built to the highest standards.

Overarching all this there should be a plan for a sustainable, more liveable city. While rebuilding the architectural charms of the city, the chance must not to lost to design transport and energy systems using the very best of 21st tech and knowledge. Rebuilding should not be done ad hoc and on the cheap. Planning needs to start now.

A final note. At the time of the first quake, I suggested transferring the EQC levy from home insurance premiums to rate so contributions to nd access to the scheme would be universal. I also suggested a tiny natural disaster income protection levy of about $5 per worker per year to cover wages up to the average wage. Obviously, neither of these ideas could have been in place in time for this second quake but they should still be looked at.

42 comments on “Govt must lead Chch rebuild”

  1. Lanthanide 1

    This is mostly sarcastic, but as the geological analysis continues, we may find that CHCH is now at ‘lesser risk’ of large quakes in the foreseeable future than Wellington. They should move parliament to CHCH.

  2. The Economic Illiteracy Support Group 2

    The other immediate source of funding for rebuilding Christchurch is the $11 billion that Steven Joyce intends spending on roads in the next decade. The choice between reconstructing people’s homes and building more motorways should not be a difficult one – except for the National Party. of course.

    • Lanthanide 2.1

      I’m wondering when/if work on the motorway they were building through CHCH (right near my house and work, I use the existing one quite frequently) will start up again.

      On Wednesday when I left, the cranes were still up in the air. On Sunday when I got back, they’d lowered them so they’re lying on the ground now.

      captcha: week

    • RobertM 2.2

      Excellent. Like San Francisco we should stop building motorways. Joyce and Blinglish don’t seem to have got the message of Celia Wade Brown’s victory. Prentergasts crime of the motorway ripping the heart out of Wellington needs to be stopped.
      Beyond the green idea of a levy, the other obvious source of revenue would be modifying the student fees which are very low by international standards.
      But I don’t know how much the CBD should be rebuilt- why not just make it a green zone extension of hagley park with a few galleries. Most of the major corporates will have relocated elsewhere within Christchurch. And I suspect the earthquake has finally destroyed the human heart of Christchurch. Most of the interesting lanes, bars and establishments that the ‘Melbournisatiion ‘ of Christchurch was being based on will have disappeared under rubble.
      Has SOL square survived. What about the Invercargill safety tram of l921 they were rebuilding at Ferrymead. Possibly two international cities Auck and Wgtn are all that is possible.

  3. lprent 3

    Bugger the buildings, that is almost a secondary consideration (although worth planning for now). What I’m interested in is seeing the plan for putting the infrastructure back in place.

    People can’t live or work effectively if the roads have ruddy great big holes in them, the water system is erratic or non-existent or contaminated by sewerage, the sewerage system excretes onto the surface or into the water tables, the power has brownouts or frequent failures, fuel storage systems create high risks from leakage and the telecoms goes up and down like a yo-yo.

    What I haven’t seen anywhere yet is a coherent timetable or where and when the money and resources will arrive to make that happen. There is quite a time constraint because if those services are not repaired over the next few months then; businesses will fold, people will leave; and a lot of the rebuilding becomes a bit moot.

    It is implicit in the bit of funding to tide over companies and their employees that this will happen in the next 6 weeks. But if there isn’t a clear plan for it now then businesses might as well use that money to shut themselves down gracefully.

  4. Tel 4

    The traditional response to disasters like Christchurch is almost always based around the Government stumping up and carrying out a rebuild. Government (and local government) resolve in disaster management carries with it muscle and firepower, but it also inherently generates waste, and high costs of compliance. There is another way.

    I’ve maintained an opinion for most of my working life in architecture that we (NZ) need to be able to opt out of complying with the Building Act and build whatever we want, out of anything we want, where ever we want. A basic national safe and sanitary standard (some of which has been written and has existed in the past with the old NZS1900) would need to exist to protect both owners and the public, and compliance with planning ordinances nationally adhered to, but otherwise do what you like. Planning bylaws in CHCH on the other hand could easily be put back to the public for re-evaluation and a new consensus formed about the future for the city. What better time than right now?

    The right winged thinkers usually throw their hands up in horror when confronted with such ideas, foaming at the mouth and gibbering wildly about plummeting house values, and sandle wearing hippies living next door, and yet the basic value is based around individuals taking responsibility and action. The consenting system could still operate in parallel, and consumers would have a choice on the property market. Purchase a code compliant building and pay a premium (? I would argue many current code compliant buildings are worth no more than houses made of old rope and cow dung) or purchase an un-consented building and let the market realise it’s true value. Given the abject failure of some of our buildings due to the CHCH earthquake and the leaky building epidemic, why would any sane person argue that it’s worked or will even continue to work?

    CHCH needs to become a vibrant happening place, encouraging free thinking and invention, and from this new industries may well spring up, creating a new momentum and enthusiasm for people to live there or seek it out.

    Under any National lead coalition all we’ll see is a strangled financial response, unsustainable haphazard private development, and decades of social problems we’ll all end up paying for one way or another. Key and his cronies are incapable of doing anything else, too fearful and conservative to take a bold step. With National “CH-CH” is the sound of a gun being loaded. I’m just wondering where they’re going to point it.

    • RedLogix 4.1

      With National “CH-CH” is the sound of a gun being loaded. I’m just wondering where they’re going to point it.

      Cripes… that’s a potent metaphor.

    • jh 4.2

      “I’ve maintained an opinion for most of my working life in architecture that we (NZ) need to be able to opt out of complying with the Building Act and build whatever we want, out of anything we want, where ever we want. ”

      Won’t that stuff things for the neighbors? EG if you build a 100 meter tower you will cast a long shadow? My freedom begins where your’s ends?
      oops sorry didn’t read it correctly.. but you’re sure that wont happen?

    • jh 4.3

      “Planning bylaws in CHCH on the other hand could easily be put back to the public for re-evaluation and a new consensus formed about the future for the city. What better time than right now?”
      How are you going to stop maximising building per site = maximum profit.

  5. Sanctuary 5

    Equality in sacrifice from ALL New Zealanders should be what we demand from John Key.

    The idea that middle and low income New Zealanders will be expected to valiantly shoulder all the cost of the rebuilding of our city while the fat cats get to keep their tax cuts and caviar should be rightly reviled as the repulsive actions of plutocrats it is by all patriotic Kiwis.

  6. Bed Rater 6

    “The private sector won’t rebuild without demand, ”

    Yes, and if there is no demand, then there is no reason to rebuild. Private funds, from insurance payouts (e.g. EQC, and private insurers) will go where the holders of these funds direct. If it’s not Christchurch, then it’s just not meant to be.

    • Colonial Viper 6.1

      Without the deftest management by the CCC and central Government, the majority of Christchurch CBD buildings which need to be rebuilt will not be.

      The business calculus for the owners of all those destroyed commercial buildings is simple. With their upcoming insurance payouts, those commercial property owners have essentially found instant buyers for their buildings.

      With those millions in insurance monies, these property owners can either decide to rebuild or they can decide to run. This is what they are going to consider while making this decision:

      – All their former tenants gone or going out of business.
      – Vast uncertainties in Christchurch property values going forwards.
      – A probability of serious urban depopulation over the next 24 months

      What would you do with the money?

  7. IrishBill 7

    It looks like it will be working people with children and students that have to pay: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10709454

    • Teej 7.1

      Yeah – the irony is that my family will be forced to leave Christchurch (and NZ) not ‘cos of the quake, but ‘cos of Bill English’s masturbatory fixation on New Right “solutions”. Surely a levy on all Kiwis is the fairest way to generate the funds to fix my city? And besides, if it’s good enough for the Aussies, surely it’s good enough for us… Beating up on the poor, students and the rest is unnecessarily cruel.

    • Pay 7.2

      You mean they will “pay” by loosing their subsidy. I’m a working person without children to visit me when I’m lonely in my old age but I have to pay for those that do (but that’s another story).

  8. Monty 8

    This earthquake is tragic in very sense. The loss of life, of house, of community (as some people leave on a permanent basis) of everything the people of Christchurch has known is someting I would never wish on a single person.

    But rebuilding of the CBD and even of the houses lost is not the Government responsibility. Red Tape should be cleared to allow bulding to progress faster, but importantly that doing this does not sacrifice quality. And ensuring the engineering is done correctly is now so important for peace of mind as well as future proofing the new city that must emerge.

    Before any commercial property is rebuilt there will need to be insurance claims processed. Then new tenants will need to be found. The issue here is that newer and better quality buildings will be constructed to replace the older buildings. The better quality buildings will need to attract tenants. Tenants who may no longer exist, or who may have already left to set up shop elsewhere. The rebuilding will not happen overnight for these reasons. But perhaps over a decade maybe even two decades. It is foolish to think that re-building the demolished shop/ office/ factory / house will happen just because there has been an insurance payout. So much more needs to happen first – not the least the aftershocks to stop. Labour may also be a limiting factor. Have the workers left town? One thing is for sure – market rates for people with in demand skills should increase and as a result they may get wage increases. (The Market will find the right rate)

    The urgent priorities will be to get the roads and water services functional. Then there needs to be a plan for the city – high priority sites and lower priority will be identified. we know you lot just love the idea of tax cuts – but then again the country did not vote National in to raise taxes – and I suppose in November 2011 we will all decide whether or not the country wants the National Party solution or the Labour Party Solution. I have a strong feeling your envu politics will be voted down by the people. In much the same way – I do not expect your ideas on welfare expansion to get much of a showing.

    [Most of this comment is just fine… but flogging the tired old troll line ‘the politics of envy’ triggers the wrong kind of attention. …RL]

    • Red Tape should be cleared to allow bulding to progress faster

      Yep, lets clear that red tape. Get rid of it, it is unnecessary and puts a brake on private enterprise.

      We should start with earthquake standards, after all Christchurch will never be hit by an earthquake, let alone two.

      There are successful overseas models such as Haiti …

      • Monty 8.1.1

        Fool – since you are incapable of reading I will repeat this part “Red Tape should be cleared to allow bulding to progress faster, but importantly that doing this does not sacrifice quality. And ensuring the engineering is done correctly is now so important for peace of mind as well as future proofing the new city that must emerge.”

        Plenty of red tape can be cleared by improving the consent process further. National Has of course taken steps in this regard, but there is still room for improvement

        • The Voice of Reason 8.1.1.1

          “Fool – since you are incapable of reading”

          You mean comprehending, Monty. Something Micky does way better than you.

          NZ is possibly the most red tape free country in the English speaking world and our consents processes are a doddle, particularly as you are not required to bribe your way through them. I like what little red tape we do have, too, because it’s what saved thousands of lives last Tuesday.

          • Lanthanide 8.1.1.1.1

            It’s a common righty delusion that we somehow have too much regulation and red-tape. National likes to parrot it every chance they get.

            I recall a survey done that concluded that NZ was the easiest country to do business in.

            • weka 8.1.1.1.1.1

              I’m not sure exactly what is being meant by red tape here, and I have no problem at all with stringent earthquake building regulations.

              But. There has been a massive change in the past decade in terms of the building consent process. It’s much more convoluted and expensive. Most people I know in the building trade put this down to over-reactions to leaky buildling syndrome (aka arse-covering by councils). I’m speaking of the experience of house building here.

              People trying to build within the sustainability sector, people who should be being supported and encouraged as we approach peak oil and climate change effects, face extraordinary difficulties getting new technologies accepted by councils. There is also a general inconsistency across the country in this regard which suggests that councils interpret things differently and come to different conclusions about what is ok practice and process.

              That’s all general comment, nothing about Chch in particular, except I will say this – there are still many kiwis capable of building their own homes and it’s much more difficult to do that now, not because we’re being safer but because we being scared.

              • Eddie

                considering leaky homes is a problem with a cost on the scale of the Chch earthquakes ($11.3 billion is the mid-range estimate), I’m hesitant about labeling stringent controls resulting from it as overreaction.

                It’s an enormous waste of capital to build a house, which should have a design life of a hundred years plus, only to have it have a good chance of failing within a couple of decades.

                • weka

                  Yes, but wasn’t the leaky building thing about cowboys not codes? I think it’s a fallacy that leaky building syndrome happened because we had lax codes. It happened because we had too many greedy and stupid people in the building industry.

                  All I know is that it’s much harder to build houses now (I’m in the SI) and that’s not because we needed more codes. It’s because councils have to be incredibly careful post-leaky building claims. So all the cowboys that built leaky homes have affected everyone else who already knew where the sensible limits were. It’s stiffling innovation, and creating an increasingly toxic industry far from the sustainable building that we should be excelling at now.

                  It’s also making homebuilding more and more for the rich. It’s possible to build simple, safe, structurally sound houses that will last a hundred years that aren’t hugely expensive. The consent process is driving up costs unnecessarily.

                  • Lanthanide

                    “It happened because we had too many greedy and stupid people in the building industry.”

                    How has this changed?

        • mickysavage 8.1.1.2

          But Monty I was suggesting that “red tape” actually has a really important role, just like bureaucrats. Earthquake standards are just one example of red tape which has shown to be very important.

          How about you list specific areas so we can see if reductions can be made.

          And how about you list overseas areas which present a model for what we should aspire to. I suggested Haiti because it does not have many standards. But a similar sized earthquake resulted in 300,000 deaths.

          Otherwise your statement reads like a string of slogans. Who can argue with cutting of red tape while at the same time not sacrificing quality and ensuring correct engineering and future proofing. The thing is that you may actually after analysis decide this is represented by the status quo.

          • Tel 8.1.1.2.1

            I have a slightly different take on red tape. If I was a government appointed contractor looking to improve the bottom line, the obvious “red tape” (read compliance costs) to cut through is too lobby government to waive the entire consenting process and fees. Obviously government would need to sign some form of insurance bond to guarantee owners are getting the real McCoy and to reassure the council they would not be held liable for any of the applied work.

            Will the only wedge(y) Parker get, be the one from behind by the biggest play ground bully in the country? 😯 😆

  9. Fisiani 9

    http://www.national.org.nz/Article.aspx?ArticleID=35289

    The government announces it will NOT lead Christchurch rebuilding. No.
    The government announces it will lead Christchurch rebuilding.
    Straw man argument fails again.

    • Lanthanide 9.1

      If John Key said black was white I’m sure you’d believe him, too.

      Talk is cheap.

    • Colonial Viper 9.2

      You see a Press Release from NACT and cheer.

      I’m waiting for a new CBD.

      Let’s talk again a bit down the track eh?

      • Lanthanide 9.2.1

        lprent was right, Fisi is such a laputian that his statements are so full of holes that they only have one simple and obvious rebuttal.

  10. Terry 10

    Look, I’m no political genius but as a Christchurch resident I believe John Key should reverse the tax cuts for the rich and channel that money into the recovery of our city. The rich don’t need the money (they never did) but we do.

    • Agreed Terry.

      Phil Goff came out today and expressed concern that the earthquake may be used to justify cuts to working for families and interest free student loans. Hopefully he will announce the reversal of the tax cuts as Labour policy so that Christchurch can be rebuilt if Labour wins.

      • Lanthanide 10.1.1

        They can very easily stand on this if National even try and cut WFF or IFSL.

        It can go like this:
        1. National promised fiscally neutral tax cuts, on the assumption that we would have growth to pay for them
        1a. Due to the horrible fiscal management of this government (use recent growth forecast of 2.3% to 0.3% with 1/2 of that being due to poor economic state), and lately the earthquake, the economy has not grown.
        2. The tax cuts were not fiscally neutral, and gave $23,000/year to John Key, and $xxx,000 to Rob Fyfe (since Air NZ is publically owned he’s fair game)
        3. John Key believes he needs this money more than the people in Christchurch. Instead he is going to take money from working middle class families, and from students trying to get an education – he is taking money from our future to rebuild Chirstchurch, instead of stumping up some of his own money.
        4. John Key believes a holiday highway north of Auckland that is used for 4 weeks of the year is more important than funding the repair of normal suburban roads in Christchurch that are used 52 weeks of the year.

        You could make a solid speech around it with some nice sound bites for the media.

      • Herodotus 10.1.2

        Perhaps before Phil yet again priomises soemthing that he can not delivery, there should be extensive geoteck, feasibility and town planning work undertaken to make sure that we do not make a very large mistake.
        Let us just blindly rebuild. “as Labour policy so that Christchurch can be rebuilt if Labour wins.” What happens if we find out that Christchurch ground is not suitable? What happens when insurance coys will not insure property in Chch due to increased risk factors, how do we get $$ from banks to rebuild, banks like to have insurance policies before they lend?
        What happens if we find out that Chch should be relocated to a more westery or northerly direction. Outside historic reasons why is Chch there? The port is physically seperated from the town, shifting it (if it is applicable) 10-20 minutes away would do little to reduce the town functionally.
        There is a need for some rational thinking. There are many cases in history where a thriving city/town has been left desolate due to natural distasters that have made the locals rethink their wisdom.
        And MS glad that you want to rebuild chch on the increases of taxes on teachers, doctors, nurses, police. Perhaps if Lab instead centred its ideas on not allowing those rich friends of theirs to get away with paying min to no tax would be a start. Remember all those tax miniminsing schemes that were setup or allowed to continue unabated over that massive unsubstainable property boom???

    • The Voice of Reason 10.2

      You don’t have be a Christchurch resident to see the logic in what you are suggesting, Terry. I think the whole country agrees with you. Well, almost the whole country. Dipton differs:

      http://www.stuff.co.nz/national/politics/4718219/Govt-seeks-ways-to-pay-for-Christchurch-earthquake

  11. TightyRighty 11

    For once I even half heartedly agree with the sentiments expressed in this post. I find it interesting though that you don’t take further the idea that private groups wont rebuild without demand. I see on this site the opinion that government should spend more locally on contracts, how about expanding that idea and the buy new Zealand made campaign to a buy Canterbury made? The best thing for local manufacturing is an order, always. My manufacturers in Christchurch have expressed that to me personally and I am doing my best to supply them. Why not the rest of the country? Government could of course partake in this. Its a long term solution to a medium term catastrophe that could have far reaching benefits to all manufacturing in the nation. All without the need for excessive public spending.

    • Colonial Viper 11.1

      what do you mean by “excessive public spending” exactly?

      Because strong and appropriate public spending creates jobs, creates common infrastructure and enables egalitarian societal function in ways that private for profit enterprise never will.

    • The Economic Illiteracy Support Group 11.2

      TR is right – the best way to give confidence and stability to the Christchurch companies hit by the earthquake is to do business with them. The government needs to prime the pump by preferentially buying from Christchurch (pity they don’t build BMW limousines down there) so that the private sector has time to get their orders in. But neither party can do it on their own – it will take both government cash in the short term and private sector commitment in the medium term to restart a whole bunch of Christchurch businesses.

    • lprent 11.3

      I did. That was substantially what my comment on urgently doing the infrastructure first was about. Demand requires people and business to be present to be demanding.

      • TightyRighty 11.3.1

        Wholeheartedly agree with that sentiment. Government should take the lad in providing the framework, and therefore the confidence to do business. What must be avoided are plans to promote growth by vehicles that aren’t core government business. The one exception being taking the lead on buy Canterbury made scheme that includes both employers and unions. It’s a win win plan with far reaching economic and societal benefits. Ideally I’d like it to be placed in the hands of an NGO to avoid politicking, though given the circumstances, MED can and probably should run it.

        Oh, and CV, fuck off. This disaster should not be a vehicle for you and your ilk to try and profit politically with the aim of instituting a failed political system. Parasite.

  12. Kerry 12

    What makes the left think that government can afford the pipe dreams and provide, because individuals can’t. Stupid.
    Saw an analysis about Ireland the other day. Seems true for here. “The labour party is the party of civil servants.”
    The ripoff scheme has been to seize power. And then rob the workers so the civil servants can live fat and happy.
    An earthquake provides a good opportunity to proclaim the needs of the civil servants.

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