Christchurch
LABOUR MPs

9 June 2011 MEDIA STATEMENT
Christchurch Earthquake bulletin edition 56

The Labour Party’s Christchurch electorate MPs, Clayton Cosgrove (Waimakariri), Ruth Dyson (Port Hills), Lianne Dalziel (Christchurch East) and Brendon Burns (Christchurch Central) have started a regular bulletin to keep people in their electorates and media informed about what is happening at grass roots level.

CLAYTON COSGROVE: The biggest danger to Canterbury’s recovery is the growing lack of confidence in insurance companies. Last night I witnessed the increasing concern among earthquake victims at the way their insurance claims are being handled by insurance companies --- and while residents are worried about what they can do and what their future holds, the Government is sitting on the sidelines despite its enormous war-time powers. At last night’s Kaiapoi Residents’ Association meeting, residents heard a high quality legal presentation from an independent legal representative on the tactics being employed by some insurance companies and their project managers. Clauses are being inserted in insurance company project management contracts for the repair and rebuild of houses which seem to give the insurance companies, through their project managers, great power over claimants while claimants are left holding most of the responsibility. In one example discussed last night an insurance company is requiring claimants’ EQC payments including the excess to be immediately handed over to them on receipt. Presumably this allows the insurance company to sit on the money in the interim and earn interest before the repair or the rebuild starts There is no legal basis for this. In one case brought up last night, a bank had been written to directly in respect of a particular claimant’s payment. In another example, claimants are being asked to indemnify insurance companies and their project managers in respect of any breaches when entering into arrangements with third parties. People are asking --- WHY? Clauses are being slipped in with no explanation. These issues are causing real worry and stress for claimants who don’t have the legal expertise to interpret their contracts. At last night’s meeting, cabinet minister Kate Wilkinson said the Government would not interfere with private contractual arrangements. People aren’t asking for that. They want the Government to do what the Australian Government did --- that is, to protect claimants with some degree of legal advice to help them interpret their contracts. I have repeatedly told Gerry Brownlee this, but he isn’t listening, and nor is Kate Wilkinson. If people haven’t got the confidence in their insurance companies to sign off their claims, then this will badly impede the progress of the recovery. People are asking --- WHY won’t the Government help us? Why, after doing the right thing and paying our insurance premiums for years, should we have to pay for our own legal experts to keep some insurance companies honest? This is not about interfering in private contractual arrangements. THIS IS ABOUT CONSUMER PROTECTION. In the last Government I intervened in the real estate industry when some companies were ripping people off. I didn’t interfere in private contracts, but told the industry to sort itself out or the Government would do it. Gerry Brownlee has wartime powers. He can tell the insurance company CEOs to sort the issues out, and he can threaten legislation if they don’t. And he can provide claimants with access to legal advice at no or low cost to themselves. I will approach the Insurance Council which represents all insurers today asking for an urgent meeting with their members to present the concerns of claimants to them directly.

RUTH DYSON: The Local Government Borrowing Bill is being discussed at Select Committee this morning, and the financial situation of the Christchurch City Council is on the top of my mind as we consider this Bill. Looking at what facilities are going to be rebuilt will be a very important part of our recovery. We need to rethink our insurance model with regard to local public facilities such as the libraries and swimming pools/gymnasiums. The damage to QE2 is significant and communities dearly miss these facilities particularly when many are out of their homes. If we are underinsured in terms of replacement value, our communities will be unlikely to contribute to the shortfall for some time to come – so we will be missing out on these valuable assets. I haven’t heard any timetable from the Council in terms of making decisions about these issues but I hope that we hear from them soon. Tomorrow I am looking forward to being part of the feedback presentation for Sydenham and Lyttelton, following the focus groups and public meetings over the last few weeks to develop the recovery plan for these areas. This will mark another step forward for local people who really are feeling strong and hopeful about the future. Friday night will also see the Sumner School Hall Party, which was postponed by the earthquake. Last weekend was ‘officially’ Matariki, but Lyttelton is hosting events on Saturday morning as a process of leaving the grief of the earthquakes behind, and then on Saturday evening for the celebration of Matariki itself. It is becoming a very popular event and am sure it will be so this year too.

LIANNE DALZIEL: I am pleased the Red Cross Commission has extended the winter assistance grant beyond the over 65 age group. This will now include households significantly damaged by the September or February quakes where there are children under 5 years old. This grant helps people with their electricity bills from June to September and is paid directly to the electricity retailer at $100 per month for four months. The form and criteria for the Winter Assistance Grant for the under 5s will be available today and the grant will close on 6 July 2011. The wellbeing of many families is at stake here. I know that many people are worried the cost of their electricity bills will go through the roof where their insulation has been compromised. This helps two vulnerable populations at both ends of the age spectrum. We need to remember that these grants are only possible due to the generosity of all the people who donated to the appeal and we are very grateful for that. http://www.redcrosseqgrants.org.nz. I was concerned to learn that the Urban Development Strategy partners (Christchurch City, Selwyn, Waimakariri Councils, ECan and NZTA) have decided to advertise for a new UDS implementation manager without mentioning that there has been an earthquake. Although that should be generally known, I am concerned that it may signal that the partners do not see the need to renegotiate aspects of the UDS. I hope this isn’t a further example of the ‘business as usual’ approach that we saw after the first earthquake. The bottom line is that there is land inside the UDS’ ‘red line’ (i.e. available for residential development) that may be unsuitable for rebuilding, and land outside the red line that didn’t liquefy in either event. I would have thought that a vital aspect of this role would be the capacity to work with the partners to review the UDS in light of the earthquake and the major impact it has had on our landscape. While the future of parts of some eastern suburbs remains in limbo, we need to know that we will not be locked out of opportunities for residential development in the east because the red line did not take account of the earthquake. For more information see:
http://sheffield.co.nz/resweb/JobDtls.asp?VacID=46260

BRENDON BURNS: The fact that the Christchurch City Council is looking at substantial rates increases to cover quake damage is not unexpected. Councillors will today and tomorrow consider the options, including a rates rise of 7.5 per cent this year incorporating a quake levy of 2.2 per cent. One option I know councillors will not want to even consider is selling down any of Christchurch’s assets including the power network Orion, and majority stakes in the port and airport. But I am not the only person who believes this may be forced upon the council or required unilaterally. Finance Minister Bill English yesterday declined to rule out the sale of Christchurch City Council assets to help fund the earthquake recovery. Appearing before the Finance and Expenditure Committee on the Budget estimates, he deflected my specific question by saying this was a matter for the council. He said it was mischievous to say the Government can force such sales under the CERA legislation. In fact this entirely possible under Clauses 21 and 22 of the CERA Act which allow the Minister (Brownlee) to make any changes to Recovery Plans for the city “as he sees fit.” While the bill was being debated I put up an amendment to stop such sales; the Government defeated it. I have several times raised the issue in the House and challenged Canterbury’s National MPs to affirm that no such sales will happen. They look uneasy and never respond, reflecting the huge public sentiment in Christchurch against such sales. We held on to our assets when other councils sold theirs; hence our rates remain lower than most, subsidised 15 per cent a year by asset dividends. My proposition to Mr English was that his Budget outlined the Government’s case to reduce debt by selling assets; so why wouldn’t it do the same to the $2.2b in assets held by Christchurch City Council’s holding company (and those of the Waimakariri and Selwyn councils to boot.) Orion alone has repaid nearly $1b back to us as ratepayers over the last 20 years – around $1m a week. The Government is stumping up a very welcome $5.5b towards Canterbury recovery. It will also meet a share of the council’s $2.5b in infrastructure costs – and Mr English hinted yesterday it may be at a more generous level than the usual 60 per cent Government subsidy. That also would be welcome. But here’s some of what I read as some plain English. The Finance Minister said the Government; “is getting into a conversation with the city council about the cost sharing arrangements.” And, “..its important in the context of Christchurch that the city council has a stake in the process including meeting a share of the costs to ensure value for money from the investment.” And, “..in the end how the council meets its contributions is going to be up to the council.” And, “They’ve got some real challenges as a council to try and work out how to best employ their resources given the needs they face.” When the issue of council asset sales was first aired a month ago, Mayor Bob Parker branded it a ‘beat-up’ but then talked about the need to be ‘flexible’ in how the cost of recovery was paid. His CEO Tony Marryat said it was ‘premature’ to start talking about asset sales. I say the time is now, not after November 26.


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