Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Paying to rebuild CHCH: A small temporary earthquake levy

Paying to rebuild Christchurch: A small temporary earthquake levy

Published: February 25, 2011
by Russel Norman

While the horror of Christchurch’s second earthquake continues to unfold, those of us not immediately involved in the recovery can begin to plan for the rebuilding of a city and the livelihoods of those who live there.

The question that immediately comes to mind is how are we going to pay for the recovery and reconstruction?

The Earthquake Commission (EQC) and private insurance will cover most of the cost to private property. Everything else—the hospitals, the roads, the rail, the sewage—will likely be borne by central government. More borrowing by central government is being contemplated.

As a practical, principled response to the Christchurch earthquake, the Green Party is putting forward for discussion the idea of a small temporary earthquake levy on all income earners over $48,000.

The levy would work like the one being introduced in Australia to pay the A$7.2 billion fix-it bill after their floods.

To make it fair, the levy would fall on those most able to pay it. Those earning between $48,000 and $70,000 a year could pay up to an additional one per cent income tax, while those earning over $70,000 could pay up to an additional two per cent income tax to help pay for the reconstruction of Christchurch. (People earning less than $48,000 and all those living in the Christchurch region would be exempt from paying the levy.)

A levy at those levels would raise an additional $921 million per year and be directly tagged for disaster relief and reconstruction. The levy could last for a defined time period such as a year, or end with the reconstruction of Christchurch, whatever comes first.

Here are a number of different levy scenarios with estimates of the amounts they raise:

Income band Scenario 1 ($M) Scenario 2 ($M) Scenario 3 ($M)
$48,000-70,000 (@0.5%) $118 (@1.0%) $236 (@1.0%) $236
$70,000+ (@1.0%) $343 (@1.5%) $514 (@2.0%) $685

Total yearly revenue $461 $750 $921
The additional tax to pay for individuals would look like:
Income (pa) Scenario 1 ($/week) Scenario 2 ($/week) Scenario 3 ($/week)

$50,000 $4.80 $9.61 $9.61
$60,000 $5.77 $11.54 S11.54
$70,000 $13.46 $13.46 S13.46
$80,000 $15.38 $23.08 $30.77

There are those who argue against such a levy. Australia’s flood levy has been attacked by the Right who argue that further government cutbacks are the best way to find the necessary funds to pay for their flood damage. And a new, albeit tiny, tax raise for upper-income earners goes against the Key Government’s current pathway towards a flat tax structure. And of course we have already paid into the EQC kitty over many years.

However, we don’t believe these arguments against a small temporary levy are convincing. The public sector is already being cut and further cutbacks won’t help the jobs situation. A tax rise may go against National Party ideology but it is only temporary for a national emergency situation. And the size of the damage bill appears to be greater than current reserves and re-insurance.

With this small temporary earthquake levy we don’t wish to politicise the argument. We don’t wish to re-litigate the argument around National’s tax changes, nor do we think the Right should use the opportunity to promote their agenda of asset sales to pay for the damage. We need a pragmatic response to the situation we’re in. We can return to the arguments about tax rates and privatisation later.

A small temporary earthquake levy does appear to offer a fair way for all of us to do our bit to contribute to Christchurch’s recovery without adding to Government debt. We welcome your feedback.

ENDS


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Extended Cease Fire: Gaza Celebrates!!!!

Images and video from Gaza.Scoop - Julie Webb Pullman in Gaza.

Gazans took to the streets tonight to celebrate their victory in achieving the end of hostilities and the lifting of the illegal seven-year siege. Whatever tomorrow may bring, tonight was a time to rejoice! More>>

Details:

 

Parliament Today:

Collins 'Misinterprets Media Reports': "Too Compromised To Remain Justice Minister"

Bizarre claims by Judith Collins this morning that she had been cleared of inappropriate behaviour by the Privacy Commissioner demonstrates she is too compromised to remain Justice Minister, Labour MP Grant Robertson says. More>>

ALSO:

Labour On Climate Change: Focus On The Now For The Future

A Labour Government will put in place a comprehensive climate change strategy focusing on both mitigation and adaptation, establish an independent Climate Commission and implement carbon budgeting, says Labour Climate Change spokesperson Moana Mackey. More>>

ALSO:

Gordon Campbell: On National’s Housing Assistance Plan

So, as many as 90,000 people could derive some benefit from National’s housing assistance plans for low and middle-income earners... Yet in reality, the benefits seem likely to be insignificant, and they will be skewed towards those at the top end of the income group that’s supposedly the target. More>>

ALSO:

Election Data Consortium: National’s Worst Case Scenario At Stage One?

A month out from the general election and ipredict traders are still forecasting National’s vote to slip below current polling levels and there is potential for it to fall further. More>>

ALSO:

From The Scoop Video Archive: PM Says SIS "Told Me" About OIA Release

In a press conference immediately following an controversial OIA release of notes on an SIS briefing to then Labour leader Phil Goff, Key said "at that point [Tucker] told me he'd release it ...". Since the release of Nicky Hager's 'Dirty Politics' Key has denied being personally informed and said references by officials to 'the PM' being told briefed referred to his office. He now says the same about his own statement. More>>

ALSO:

  • Scoop Video in the news - New questions over Key claims | NZ Herald News - Stuff.co.nz
  • Earlier - Felix Marwick: Laying out facts over SIS documents - Newstalk ZB
  • Labour - Director’s letter contradicts Key’s claims
  • ACT - The Letter - 26 days to go
  • TV3 Video - Housing issue nudges Dirty Politics aside - David Cunliffe: Key's SIS explanation 'defies belief' - SIS leak came from Key's Office - Goff - Key 'categorically denies' Slater OIA discussion - Video: Key faces more Dirty Politics questions

  • TVNZ - Winston Peters: ‘Dirty Politics' is a new low
  • The Nation - Debate Between Grant Robertson And Russel Norman
  • NZ First - “The Words Mean What I Say They Mean”
  • Schools, PPTA Sign Up: Primary Teachers And Principals Vote Down Govt Plan

    Teachers and principals have voted overwhelmingly against the Government’s controversial “Investing in Educational Success” policy, including proposed highly-paid principal and teacher roles. More>>

    ALSO:

    Gordon Campbell: On The Usual Round Of Mud Slinging And Name-Calling

    This week gave an interesting example of how hard it is to untangle the reality from the slanging matches. The issue that emerged early this week could hardly be more important. Does the government intend to cut spending in health, education and on the environment if re-elected, or not? More>>

    Earlier:

    Electionresults.co.nz: National and NZ First Rise in Roy Morgan Poll

    National has bounced back in the latest Roy Morgan Poll but the big winner has been New Zealand First who rise to their highest level of support since September 2013. More>>

    ALSO:

    Get More From Scoop

     

    LATEST HEADLINES

     
     
     
     
     
     
     
     
    Parliament
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news