Labour’s EQC policy

Written By: - Date published: 11:56 am, November 3rd, 2011 - 17 comments
Categories: disaster - Tags: , ,

Labour’s EQC policy has taken the holes in the current system revealed by the earthquakes – too low cap, inequitable flat levy, non-universal coverage, lack of provision for accommodation coverage – and fixed them. On top of that, they’ve promised to give people access to their geotech info. Great policy. No wonder National’s angry.

I won’t go through the whole policy but the guts of it is they will move the EQC levy from home insurance, which not everyone has, to rates. And they’ll make it proportional to ratable value. That makes sense, a million dollar house is far more likely to get $50,000 of damage than a $250,000 house is (of course, they’ll both have the same cap but most homes, even in Christchurch, aren’t damaged up to the cap). Currently, the EQC levy is basically a poll tax on people who have home insurance. Labour’s solution is logical.

Labour will also raise that coverage cap and include some things in that coverage that aren’t currently allowed for. That’ll cost – although, again, most claims don’t reach the cap – and that’ll mean a slightly higher levy. But the alternative is to do what National did – go to the markets and borrow $5.5 billion in a time of disaster when the EQC fund was inadequate. Better to have that money already salted away for the rainy day. That’s what Labour is going to do.

And providing people with their geotech information will be a massive relief for Christchurch families who are unable to rebuild because they don’t kow the state of their land Gerry Brownlee has refused to do this before the election and, in the debate last night, Key gave the impression that it was too hard to give the information on a property by property basis (bollocks, how did they zone the houses then?) and he would never provide it.

The TVNZ article was telling. Redzoners praising the policy to high heaven. Angry, out of touch Brownlee making a false and silly accounting argument.

Another policy that is the right thing for New Zealand and a vote winner. Chalk up another point for Labour.

17 comments on “Labour’s EQC policy”

  1. Dv 1

    Sounds sensible.

  2. vto 2

    How about adding this one to your policy ….

    The biggest shit here is the time it has taken for EQC to attend to this disaster and get around each home. And please don’t give me the line that “it is the biggest job ever”. That is bullshit. Just like the insurance companies, EQC covered (approx.) 150,000 dwellings in Chch for an event of exactly this nature. What did they think would happen when a big one hit? Only a couple of thousand claims? Surely not. They covered it but in fact didn’t have it covered.

    Anyways, rant rant, , , just make sure EQC has a plan to ramp up to handle the massive number of claims that will result when a big one hits another of our big cities. DO NOT WAIT UNTIL IT HAPPENS BEFORE FORMULATING THE PLAN.

    This particularly aspect, for both EQC and insurance companies, has been bloody galling. If someone is going to cover thousands of houses in one location then make sure you can handle tousands of claims in one location when the shit hits the faultline.


    • If there is one lesson from 2011 that we have to learn (apart from “Never elect financier-plonkers to office but put them all on an island with a bottle of water, a few muesli bars and a jar of vaseline) – is that we need to educate people about planning for eventualities….
      EQC response to, I don’t know, an earthquake
      Maritime NZ response to, of all things, a maritime oil spill
      The planning of NZ businesses that rely on gas for, I don’t know, a lack of gas.
      The planning of NZ businesses that rely on computers for not being able to get access to them (a la Chch CBD business)
      The planning of NZ businesses should their business be interrupted (a la Business Interruption Insurance for Tauranga/Chch businesses).
      Miner’s families to the possibility that their loved one may not come home from a dangerous occupation and may be entombed.

    • Ari 2.2

      I actually work as part of the EQC effort, and I can tell you that the “biggest job ever” line is not just spin. Other countries are sending people to see how we’re doing it, as this is now one of the best-organised and largest public disaster insurance operations in the world. Other disasters have been bigger, but none of them has ever occured under a public insurance scheme before.

      I agree with you that it would have been great if EQC had been prepared to upscale before the earthquake, but it wasn’t, because nobody takes disaster preparation seriously before the disaster happens. I’d actually like to see a lot more spent on disaster preparedness both locally and nationally, although probably more along the lines of increased building and planning standards. We can and should do better in this area for future disasters, and EQC should have the plans in place to expand as necessary. But all of that is mostly just hindsight.

      Yeah, services aren’t always getting to individual people as fast as they need or want them. But if you actually saw what the job was like from this end, you’d understand just how hard everyone works, the overtime that people put in and don’t ask to be paid for, and how seriously we take the idea of processing claims as accurately and quickly as possible so that people get their homes, lives, and livelihoods back whenever possible.

      • vto 2.2.1

        Thanks Ari. I hope you realise my rant was aimed at the non-planning and preparedness by the pre-earthquake EQC bureaucrats and not the individual people working in the system. I have found them to be great and conscientious etc. Tough job, given the abject failure of the relevant Ministers of the Crown who have been responsible for EQC. It is they who need the bollocking (oops, gendered language). That failure has been monumental. Who were the relevant Ministers over the last few decades?

        All the best and keep up the good work – just don’t look to the Minister of EQC and his immediate lackeys for leadership or ability.

        • Ari

          Oh, I totally got that. 🙂 Hopefully one of the lessons learned from the Canterbury Earthquake is that investing in disaster mitigation and preparation is something you should be doing all the time, even if you’re not an area known to have a specific type of disaster. It’s unfortunately a political tendancy to underfund disaster prevention and response, and simply bet that things will go okay during your own term in government, and that’s a weakness of a representative system that we need to think about combating. Labour’s proposal is a good one, and it’s the type of thing we should be thinking about as a baseline in this area in the future.

          Mostly, I wanted to address the criticism that the canterbury earthquake is not a monumental job- which simply isn’t true if you consider the response compared to other public insurance schemes. 🙂

  3. This is just another blindingly obvious problem that National have faced and done nothing about! Good solution, (not sure about the variable levy with fixed compensation ceiling – need more info)
    Where would National’s books be now if Labour had not instituted the Earthquake and War Damage Commission? Another case of those nasty socialists and their short sighted policies 😉

  4. Lanthanide 4

    This morning on the radio, Gerry Brownlee was saying that geotech information for individual properties didn’t exist, and that he never said it did.

    But he did say that. I remember him saying that all geotech information would be released after all red-zone offers had been made and tidied up.

    He also claimed the 95% of people have taken up the red-zone offer.

    • vto 4.1

      “He also claimed the 95% of people have taken up the red-zone offer.”

      What? I understand from reputables close to the sauce that it is quite the reverse and that 95% have not accepted the offer to be turfed out to the wolves of the marketplace.

      someones being porkyish .

      • Lanthanide 4.1.1

        Yeah, seems like the classic attempt to downplay the opposition and make it seem like they’re a small minority of disgruntled people.

        Labour, or someone, should do a survey that covers a good chunk of the households affected and find out what they really think.

    • Ari 4.2

      Without going into specifics, in my experience you’re right and Brownlee isn’t.

  5. Very sensible idea.
    In keeping with the theme of the campaign I thought that Goff should make more about the fact that the predecessor of the EQC was established in 1946 by the first Labour Government under Peter Frazer.
    Another policy that has stood the test of time.

  6. ghostwhowalksnz 6

    There is also the question of land damage ( due to earthquake or landslide). Normal insurance wont cover this at all only EQC.

    Yet the premium is based on the $100,000 value of a house on site.

    Riddell Rd in Aucklands Eastern suburbs, ( where Don Brash used to live) is notoriously unstable, with many expensive houses close to the cliff edge. Yet these owners pay the same EQC levies as an ordinary house in say flat Papatotoe. The sandy soils behind Mission bay would liquefy in an instant as well ,yet they pay the same as a property in Mt Roskill on clay or volcanic soils

    The levies based on capital value will fix this problem. At the moment EQC is providing insurance cover for land for free.

  7. Fortran 7

    Thank goodness for the EQC.
    With no real losses since 1946 it has enabled a large fund to be established with some good settlements. We really only hear about the poor ones.
    Imagine what would have been the situation without $6 billion of funds readily available.
    Then we could really scream.
    A serious review is to be undertaken in 2012, irespective of who governs. EQC cannot remain as it was. But thank goodness we had it. Thanks Mr Fraser.

  8. Draco T Bastard 8

    Better to have that money already salted away for the rainy day.

    But what happens when there’s no resources left to rebuild? No amount of money can produce resources that don’t exist and yet we keep going on using up all of the resources we do have as fast as possible.

  9. fender 9

    It’s their proactive problem solving and their interest to see things improved for the future that makes Labour streets ahead of Key and his muddling bunch of non-achievers. Their desire to improve the short-comings of EQC is yet another example and I like their proposals. The sooner that lyer goes to Hawaii and spends time snorkeling in a lead wetsuit the better.

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