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Govt flood spending to cost about $130 million

17 March 2004 Media Statement

Govt flood recovery spending expected to cost about $130 million

Prime Minister Helen Clark, Agricultural Minister Jim Sutton and Civil Defence Minister George Hawkins today announced details of a purpose-designed package for those affected by the February floods.

Helen Clark said the government response went well beyond existing standard policies for disaster recovery because of the magnitude and economic impact of the natural disaster.

“The government is already providing around $90 million support through its existing standard response policies and other measures agreed over the past few weeks,” Helen Clark said.

“These measures cover response activities of the emergency services, immediate welfare needs for people affected, labour through TaskForce Green to help with the clean-up, support and advisory services, repairing critical infrastructure such as roads and bridges, flexibility to the Income Tax Act, and matching of donations to flood relief appeals.

“The measures being announced today will cost up to a further $40 million.

“Today’s decisions mean that, in total, the government will be committing about $130 million to help the flood recovery exercise.

“The further aid package agreed today consists of two major elements. They are an agricultural package of about $25 million; and a broader community package of $15 million that includes more than $11 million in rates remission for those most affected, and additional assistance for road repairs.

Helen Clark said the floods had been a major disaster for the lower North Island. They had dealt a serious blow to the economic infrastructure of several regions, and caused devastation to communities.

“The government is under no illusion as to the severity of the events of mid-February. The flooding caused extensive damage to roads, bridges and other infrastructure, devastated farms and other rural activities, wrecked houses and put at risk the livelihoods of many.

“The government is convinced that it must act quickly and generously to prevent wider regional economic impacts


Standard Measures Estimated cost ($m)
a) 100% of the initial response costs incurred by local authorities in taking care of the immediate welfare needs of those displaced as a result of the disaster 1.5-2.5
b) Costs incurred by the NZDF and emergency services in assisting with the emergency response >1.0
c) Civil defence payments to cover welfare costs for evacuees 2.4-3.9
d) Rural assistance payments to farmers not generating enough income to meet essential living expenses 0.5-0.9
e) 100% of the cost to repair state highways >10.0
f) Up to 90% of the cost to repair local roads and bridges 51.6
g) 60% of the cost to repair essential council infrastructure (beyond a threshold) 7.0
Total $74-77 million


Additional measures approved in recent weeks Estimated cost ($m)
a) Contribute to Mayoral relief funds 0.3
b) Match donations to flood relief appeals 4.9
c) Activate an enhanced, flexible Taskforce Green to help clean-up and repair damage 6.0-10.0
d) Establish a support service to victims of the disaster and personnel involved in the response 0.5
e) Implement a range of agricultural recovery measures (agricultural recovery facilitators, rural support coordinators, technical advice programme) 0.7
f) Amend the Tax Administration Act to allow IRD to remit Use of Money Interest and accept late re-estimation of provisional tax in relation to affected taxpayers 1.5
g) Appoint a national recovery support facilitator to ensure central government’s efforts are well-integrated 0.1
Total $14-18 million


Additional measures agreed today Estimated cost ($m)
a) Agricultural recovery package:
o financial assistance to farmers and growers to help restore essential on-farm infrastructure ($23.7m)
o new start grants for farmers and growers who are forced to leave their properties as a result of the floods ($1.2m)
o associated administrative costs ($0.42m)
25
b) Grants to local authorities to allow them to remit rates on income-generating properties (farm and/or non-farm businesses)
11
c) Further assistance to councils for repairing local roads
4
Total $40 million

ENDS

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