$8.5 billion government bill to rebuild Christchurch

The Government expects to spend about $8.5 billion over the next four or five years to help rebuild Christchurch. The earthquakes do not fundamentally change our economic situation or the Government’s programme. They simply make the task of returning to surplus a little more difficult. Latest estimates put the direct cost to the Government at about $5.5 billion, which will be fully provided for in the Budget on 19 May. About $3 billion of this relates to our share of local government infrastructure, roads, insurance excesses on schools and hospitals, temporary housing, and land remediation agreed after the September quake, demolition costs in the CBD, ACC costs, and the business support package. The remaining $2.5 billion is expected costs of decisions we have yet to make – the biggest cost is likely to be remediation of land damage from the February quake. The direct cost to EQC of meeting residential property damage will be at least $3 billion, making a total direct cost to Government of about $8.5 billion. We need to get the rebuild underway quickly. This means borrowing more in the short term. The Budget will clearly set out the Government’s plan to return to surplus, so we can start paying off this debt. More information: http://www.beehive.govt.nz/release/govt-spend-85b-rebuilding-christchurch