The Budget and the Christchurch rebuild

Written By: - Date published: 9:39 am, May 17th, 2014 - 44 comments
Categories: budget 2014, Gerry Brownlee, national, national/act government - Tags: , ,

christchurch dome collapse

As time goes by and the details of the budget are explored I anticipate there will be some nasty shocks appearing. The first one appears to be that the funding for the Christchurch rebuild has been cut.

From the Press:

A surprise $300 million boost to the Government’s trumpeted Budget surplus relies mainly on a cut to the Earthquake Commission’s insurance bill, Treasury forecasts show.

In December the 2014-15 surplus was tipped at a “wafer thin” $86m, leaving the Government’s flagship promise on a knife edge.

But Budget documents show the improvement to $372m was given a $200m boost from “lower insurance expenses after an updated valuation of EQC’s insurance liabilities”.

The change gives the Government a much-needed buffer against nasty surprises which could emerge to threaten its talisman surplus between now and Treasury’s final pre-election forecasts, due in August.

Keith Ng’s analysis suggests that there has been a total reduction in the spend on the Christchurch rebuild of $524 million.  At a time when the rebuild is getting under way this is extraordinary. David Parker’s estimate is that the reduction is $567 million and this is from the Crown’s half share of local infrastructure rebuild.

No wonder Gerry Brownlee was so grumpy with the recent Kordamentha report commissioned by Christchurch City which suggested that costs of the rebuild had been underestimated by $500 million dollars.  Even before it was released he was trying to undermine it’s validity.

He also has tried to suggest that the Government does not need to meet the cost of flood repair and reinstatement for the Flockton Basin.  He really excelled himself recently by suggesting that the earthquakes are not the cause of the flooding. Radio New Zealand has quoted him as saying:

The difficulty here is that the flooding is perhaps exacerbated by the earthquakes, but not entirely caused by the earthquakes so first responsibility does lie with the city council.”

His problem however is that residents of the flood-prone Flockton Basin say the floods have become worse since the quakes.  Their sections have sunk and the ability of Dudley Creek to drain storm water has been impaired.

The Radio New Zealand article included comments from Insurance Law Expert Duncan Webb which contradicted Brownlee’s views.

Insurance law expert Dr Duncan Webb said that irrespective of the cause of the flooding, the city council was responsible for maintaining land drainage.

He said landowners did have a right to compensation from EQC where their land had been damaged and become more flood prone.

“There’s two quite separate things going on,” he said. “One is the prevention of the flood or the removal of the water through the drainage channels – that’s the city council’s obligation.

“The fact though, is that the land is worse land than it was. It has been damaged and the land damage is EQC’s obligation”.

So it looks like the Government has to and should get the cheque book out.

Brownlee’s and the Government’s obvious problem is that if the Government is obliged to do something about the flooding it will not reach surplus.

James Dann has described the situation well.

Remember back to the day after the February 22nd quake, when Key said that this was a journey we would walk together? Well, National has hopped into a Crown limo and sped off, without even looking back to see how we’re doing. The message is clear; if you care about the rebuild of this city, about ensuring that people whose lives have been turned upside down through no fault of their own can get the assistance that they need, that they deserve, and that they were promised, then you need to throw out this government on September the 20th.

I could not agree with him more.

44 comments on “The Budget and the Christchurch rebuild”

  1. Colonial Viper 1

    The photo of Brownlee on the front page for this article provides a relevant historical note. In preparation for World War 2, the German Government which was almost broke, instituted a secretive maze of financial wizardry in order to pay for the massive military build up that Hitler undertook leading up to and after the launch of the War. Millions were employed, factories and highways built, the industrial infrastructure of a nation forged.

    Finance was made to serve the aspirations of the nation state and of the people, not the other way around.

    Today we have the reverse being the norm. People and families being sacrificed on the alter of balancing electronic ledgers and accountants’ spreadsheets. Real economic productivity and capacity, the energy, motivation and innovation of tens of thousands of unemployed young people, being poured down the drain in the name of making the books balance.

    Even Labour refuses to act upon the truth – when a sovereign country issues a sovereign currency, it never needs to be unable to fund the purchase and processing of it’s own internally supplied employment, goods and services.

    For all those people who continue to congratulate Cullen on running 3 straight terms of surpluses – billions of dollars of those surpluses comprised steps like keeping in place massive university fees. Keeping benefits harshly low, at Ruth Richardson levels. Keeping power prices high through the SOEs and making sure TVNZ would never become a true public broadcaster again as Treasury needed its profits. And now of course, part of how Labour plans to achieve future government surpluses is to cut back the flow of money into local communities by the tune of billions a year, via increasing the retirement age.

    “We can’t help the people because we can’t afford it” has been the catch cry of the neoliberal age. Yet when you look at the amount of money (and debt in circulation) it is clear that both numbers have been massively increasing with each other over the last 20 years. With most of the debt going to the bottom 95% of the population, and most of the money and wealth going to the top 5% of the population.

    It’s time for a change to this paradigm, because not only is it not serving us now, it will not serve us in preparation for the long grinding period of resource, energy, economic and demographic related decline that NZ is facing.

    • Mary 1.1

      The change you talk about will not happen while the Left continues to give its blind support to Labour. It doesn’t matter what the motives or reasons for this might be. It could be on the patently incorrect bases of “they’re better than the alternative” or “one day they’ll change”, or it might simply be a sheer ignorance of what Labour today stands for. It doesn’t matter. The fundamental problem is that the Left continues to give Labour its backing and until that stops life for more and more people in this country won’t be worth living.

      • Draco T Bastard 1.1.1

        +1

        Labour haven’t represented the people of NZ for a long time. They’re slightly better than National but they’re still all about making the rich richer and that doesn’t work.

        • Colonial Viper 1.1.1.1

          I would say that Labour are significantly better than National, but certainly still less than halfway to what NZ needs to truly get ready for what is going to be a pretty tough long industrial decline.

          • Brown Cow Walking 1.1.1.1.1

            Problem is that both main parties kowtow to the Mandarins in Treasury who are captured by Neoliberalism and Modern Monetary Theory. Some tweaking around the edges is permissable but no-one in Treasury will put their career on the line supporting – let alone suggesting – anything radical.

            When the Fed and/or the ECB finally run out of tarmac (as IMHO they will, and soon) we’ll no doubt see ‘new’ ideas introduced through panic/desparation and perhaps with a more left-wing slant aimed at mollifying the prols in order to head off bread-riots escalating into fully fledged revolution – at which point the NZ Treasury will no doubt slavishly follow suit.

          • Mary 1.1.1.1.2

            What precisely is it about Labour that makes them significantly better than National?

            Given that’s a question about a pretty broad statement guess my second question is do you think Labour is better than National when it comes to support for the poorest of the poor, benefits, social security generally?

    • Draco T Bastard 1.2

      Exactly.

      Time to go to full Sovereign Money Creation but watch how the rich will howl about that. Sovereign money that doesn’t have any interest attached stops the rich from being parasites and removes their power over the state and the people.

      • Colonial Viper 1.2.1

        Although the oligarchs seem to love money printing as long as it is just them and their investment banks who get the deluge of new funds, not the masses below.

  2. tricledrown 2

    Nationals plan is to strip Christchurch of its money making assets so they can have a money loosing stadium.

    • Colonial Viper 2.1

      To be more accurate: the stadium won’t lose money – it will in fact make plenty of money, tax payers and rate payers money – for National’s big business and corporate contractor mates.

      • greywarbler 2.1.1

        I remember being in southern Italy and the highways to nowhere with no-one on them beautifully sealed. Actually they went out to the empty sports grounds, outside the gate to the camping ground which had blocked toilets. The important basic things don’t get attended to by the high society, that is too mundane and not providing chest beating monuments to them.

        It takes a real man of the people like Hundertwasser to get the okay to design and build toilets that become money earners as tourist drawcards.)

    • Lanthanide 2.2

      Don’t worry, the stadium in it’s mooted form will never be built. I’ve been saying this since the day it was first announced and so far there’s nothing to show I’m wrong.

      It’s been officially delayed 2 years now and it’s only a matter of time until it’s re-designed to be a much cheaper open-air stadium.

      I also expect the convention centre will be downsized (right-sized, actually).

      • Puddleglum 2.2.1

        A major reason for the rugby stadium being mooted was that it took another sizeable chunk of inner city land out of supply. That increases the value of remaining land.

        The added benefit – irrespective of whether the stadium is built at all – is that the council’s commitment to help fund it has to sit on its books. That puts pressure on the council to sell assets, borrow or raise rates – all of which makes it politically vulnerable.

        [Thanks Micky for the post – I was preparing one myself about the budget including the point about the cutback to the infrastructure rebuild. I was wondering why that point hadn’t been picked up in mainstream commentary about the budget surplus.]

        • mickysavage 2.2.1.1

          Cheers Puddleglum. The possibility that this is in part an attempt to get Council to sell some of its assets is a live issue and something that needs more analysis and publicity.

          • Chooky 2.2.1.1.1

            Lets hope Christchurch is not forced by John Keys Nact government starving of rightful funds ( premeditated long term plan?) to relinquish its greatest assets:

            1.) Lyttleton Port…gateway to strategic huge Southern Ocean fishing grounds which other countries in the Northern Hemisphere (eg China) who have depleted and trashed their own fishing grounds will have their eyes on

            …. and

            2.)Christchurch International Airport ( gateway to the Antarctica and the southern regional strategic assets of oil , fishing , mineral exploration)

            ……priceless Cantabrian and New Zealand assets which will be ripe for the plucking by Nacts mates here and overseas

        • Poission 2.2.1.2

          A major reason for the rugby stadium being mooted was that it took another sizeable chunk of inner city land out of supply.

          With the Chch rebuild it is necessary to divide it into three distinct groups.

          i) Infrastructure (roads, drainage,energy reticulation etc)

          ii) Repairable stocks ( such as housing floor leveling,cracking etc)

          iii) Rebuild, Housing and commercial that are not fit for use (read repairs exceed replacement)

          The repairable stock (housing component) is in wind down mode with around 20% to be completed .

          http://www.stuff.co.nz/national/10052676/Tools-down-builders-told

          This also frees up contractors to undertake other work.

          The rebuild within the four avenues,will also cover a much smaller footprint.An equivalent floor area is expected to take around 1/6th of the land space due to replacement of single and double storey structures with additional floors.

  3. Philj 3

    xox
    Can Christchurch be the difference come this election?
    Can’t wait to find out!

    • Mark 3.1

      Absolutely. That is why Billy Bunter is trying to blame the council for everything. We brought it in 2011 but they are in serious trouble this time and they know it. Hence the blame game but numerous articles in the Press down here make it plain that no one is buying it this time.

    • Lanthanide 3.2

      It made the difference at the last election. It will make the difference at this one.

      No one here likes Brownlee.

  4. Populuxe1 4

    When one watches Discovery Chanel docos about long forgotten cities that mysteriously died, one wonders whether Reichsprotektor Brownlee is immortal or whether they just had their own.

  5. Philj 5

    xox
    Thanks for the Christchurch update intell. Good luck and strength to us all, and the folk of eq city. Is Brownlee not a shoe in?

  6. Ian 6

    Photostopping a nazi helmet to Gerald Brownlee shows how low the labour party is prepared to crawl.But when I think about it, Winstons mate,kim is a nazi and labour will need those 2 guys to form a government if the vote is close. Don’t know where the jew John Key fits into this,but time will tell.

    [lprent: Who in hell knows where that image came from. All I know is that it got used in a caption content about 3 years ago, and widespread over the net then. But tell me, do you get as indignant when we had Whaleoil photoshopping politicians and kids heads on porn pictures? Or is that just one of those disturbing thing that you’d describe as good clean fun? ]

    • Lanthanide 6.1

      Ian, this website does not represent The Labour Party. It is an independent left-wing blog-site, of which most authors are not Labour party members, let alone Labour MPs or staffers.

      • Ian 6.1.1

        Yeah right. And I’m Mother Teresa.

        [lprent: And I’m not. Banned until after the election because you made that lie about the site quite knowingly. You have been banned for it previously under another name. The length of the ban is because I’m a wee bit pissed about your previous comment. ]

    • Murray Olsen 6.2

      What’s the difference between Brownlee and Sergeant Schultz?

      Sergeant Schultz accepted that he knew nothing.
      Go and bother goats somewhere else.

    • RedLogix 6.3

      I’m fairly sure it’s a standard issue Wehrmacht helmet.

    • Tracey 6.4

      seargant shultz was a german soldier to a nazi. there is no swatika on hus helmet or uniform because he was not a nazi… not a soldier in the ss.

      I believe sergeant shultz is the basis of the picture

      I see nothing.

    • Brown Cow Walking 6.5

      I’ve always assumed the image is a rather clever reference to Brownlee’s physical resemblance to Sgt. Schulz from the ancient TV comedy series “Hogan’s Heros”, and to Sgt. Schultz’s regular habit of closing his eyes to whatever was happening in front of him with infamous the catch-phrase “I zee notink.”

      How aposite the comparison is depends, of course, on your personal assessment of Brownlee’s performance of his duties.

      (Personally and although there’s little physical resemblance I think John Key and Col. Klink from ‘Hogan’s Hero’s’ have much in common, too – affable, ineffective, easily led and almost totally concerned with keeping up the appearance of being in charge.)

  7. Philj 7

    xox
    Hi Ian
    Good buy

  8. Jrobin 8

    Ian that was an appalling comment. You have managed to offend everyone while making absolutely no logical point. Mixed metaphors and creepy anti Semitic connotations. You cant accuse anyone else of being fascist while writing this drivel.

  9. thechangeling 9

    Sergant Shultz from Hogans Hero’s anybody?

  10. Lloyd 10

    Why would anyone in Christchurch vote for anyone representing National?

    • Tracey 10.1

      blind ideology

      read coddington in the sst this morning. basically she sums up many on the right… until she actually experienced aged care of her mum and witnessed retired volunteers she had no ability to empathise… to imagine their situation… but still judged it and made political pronouncements based on it. too many living in comfort on the right think the world is for everyone how it is for them… and have an inflated view of how hard they’ve had it.

      brownlee has to be right cos if hes wrong they have to confront themselves.

  11. dave 11

    surplus is a fraud
    typical national lie cheat con

  12. tricledrown 12

    Genny Troughing Shipley will vote National earning $450,000 per year for what.

  13. Tracey 13

    betwedn the pretend loan to auckland transport and the understating of cojncil… the surplus is possibly a half a billion deficit

    time for labour to plant some memes…

    tricky
    cooking the books
    deceitful

    the kind of people who ran enron… finance companies… crooks in suits.

    • Stuart Munro 13.1

      The meme I want to see planted on Brownlee is

      audit

      Let’s appraise his performance. I have a feeling it’s not a word he likes. Even the right do not love expensive non-performers.

  14. finbar 14

    Christchurch,is a shame for a healthy profits need.

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