Winston Peters: “Time for Earthquake Plan and Tax”

Rt. Hon Winston Peters
Leader NZ First

Address to:
Cashmere Club
82 Hunter Tce Cashmere
Christchurch

21 September 2011

Extracts from a Speech

“Time for Earthquake Plan and Tax”

New Zealand First calls on the government to get on with a simple plan to rebuild Christchurch and to impose a special levy to help pay for it.

New Zealand was known to be an earthquake prone country but had never been prepared for the “big ones”.

“It is a sad commentary on New Zealand that a year after the first severe Christchurch earthquake, and seven months after the second one that political leaders are intent on points scoring and taking potshots instead of seeking solutions.

“This week the Labour Party came up with its earthquake policy as though this is a political situation and National’s response was just as pathetic.

“The people of Christchurch whose lives have been turned upside down by events not of their own making just want things fixed and to be kept in the know about what’s happening.

“The solutions are out there and we would like to summarise the best ideas we have seen and to add one or two.

“First: a small special tax levy would help provide an immediate cashflow to help finance the project. The government should set up a special earthquake tax immediately.

Second: “Stable land outside the danger zones should be taken under laws that already exist and the areas should be set aside for rebuilding homes. Individuals should not be permitted to make obscene profits from a disaster.

Third: “New Zealand should stop advertising around the world for tradespeople. Bring some Kiwis back from Australia and start using the tens of thousands of unemployed New Zealanders. Train them on the job if necessary. If our grandparents could build houses, why can’t we?

Fourth: “Start using our own raw materials like the timber from our forests that is going, in its most unprocessed state, offshore to benefit people in other countries.

Fifth: “Sort out our insurance industry and tell the people who pay insurance premiums what is being done to protect them. Homeowners and businesspeople have been paying their insurance bills for decades. What has happened to the money? It has gone in insurance company profits. These companies operate for the benefit of their shareholders or their mutual owners. This mentality has to change.

Sixth: “We have to pay fair compensation for loss and residential rehabilitation. That is what the Prime Minister promised. That is not what he is delivering now where many will be massively out of pocket because of government’s arbitrary and prejudicial decision.

“New Zealand had eighty years to prepare for the next big urban earthquake. Napier was devastated in 1931 and there have been regular earthquake events since then. Why do we avoid facing the future? Another big earthquake is always on the way. It is just a question of where and when.”

An essential element of the so called free market is risk. The insurance industry for years has been assessing risk when setting premiums. On the basis of that risk they have also taken their profits year after year. Now all of a sudden in an earthquake prone country this industry tells us that 81 years after the last really big one in Napier 1931, that we now have to pay twice.

First, to meet those costs that they can’t meet.

Second, that all over the country premiums must now go up and some by a huge amount.

Which begs the question is this how their form of capitalism works? Take all the profits when things are good and then shanghai the taxpayer when things go wrong and the industry has not put aside to cover the inevitable. Is that their idea of what insurance means?

Mr Brownlee’s recent trip to Monaco was a total waste of taxpayers money. You can be certain he never questioned their form of capitalism and merely became a message boy for the industry on higher premiums when he returned.

What’s the government doing about this? Well very little and it’s very hard to conceive of Holyoake, Fraser, Kirk or Muldoon effecting such a limp response.

The folly of selling the State Insurance Office has been cruelly exposed and it is time for New Zealand to once again own an insurance company backed by the government.

“State Insurance was sold so it could be a cash cow for the Insurance Australia Group. Set up over a hundred years ago in 1903, to provide competition for overseas owned insurance companies New Zealand taxpayers owned this company until it was set up as a state owned enterprise in 1990 and sold.

“When will we learn? The Australians bought State Insurance for cash flow and profits. It was not purchased so the Australians could work out better ways of providing benefits to New Zealanders. Things don’t work that way.

“It is obvious that we need to set up our own insurance company once again. Why? Because if there is one certainty in these uncertain times it is there will be another severe earthquake.

“It will simply be when and where. We have a list here of recent major earthquake events in New Zealand.

“There have been fourteen significant quakes since 1848. That’s an average of one about every twelve years. And, we’ve had thirteen other big shakes since 1868. That’s 27 since the Treaty of Waitangi was signed.

“We say to National and Labour and everyone else. Forget about the politics and the point scoring. Get on with sorting out the basics of recovery and look after the people who have been caught in the middle of these disasters. It is not the fault of the victims.

“We also suggest that we stop living in a she’ll be right cuckooland and accept that our country is indeed made up of shaky islands.

“That does not mean our systems should be shaky as well. Wise governments plan for the future. We have to prepare for the worst, and hope for the best and then the people of Christchurch and elsewhere can take what comes”.

Historic Earthquakes

A list of significant New Zealand earthquakes (most recent first):

• M 6.3, Christchurch, February 22 2011 The city of Christchurch experienced a major earthquake centred south of the city; severe damage and casualties occurred.
• M 7.1, Darfield (Canterbury), September 4 2010 This earthquake caused severe building damage in mid-Canterbury, particularly to the city of Christchurch.
• M 7.8, Dusky Sound, July 15 2009 This earthquake in Fiordland was New Zealand's largest for nearly 80 years.
• M 6.8, Gisborne, December 20 2007 This offshore event caused buildings to collapse in the Gisborne CBD.
• M 6.5, Edgecumbe, March 2 1987 The shallow origin of this earthquake made it very destructive.
• M 7.1, Inangahua, May 24 1968 The 1968 Inangahua earthquake caused widespread damage and was felt over much of the country.
• M 7.0, Wairarapa II, August 2 1942 The shock that struck the Wairarapa Region on August 2 was nearly as severe as the disastrous June 24 earthquake five weeks earlier.
• M 7.2, Wairarapa I, June 24 1942 This earthquake severely rocked the lower North Island on June 24 1942, causing extensive damage to local buildings.
• M 7.6, Horoeka (Pahiatua), March 5 1934 The 1934 Horoeka earthquake shook the lower North Island on March 5 1934 and was felt as far away as Auckland and Dunedin.
• M 7.8, Hawke's Bay, February 3 1931 The 1931 Hawke’s Bay earthquake caused the largest loss of life and most extensive damage of any quake in New Zealand’s recorded history.
• M 7.8, Buller (Murchison), June 17 1929 The massive rumbling of the 1929 Buller earthquake was heard as far away as New Plymouth.
• M 7.1, North Canterbury, September 1 1888 In 1888 the Amuri District was shaken by a large earthquake that reached intensities of MM 9.
• M 8.2, Wairarapa, January 23 1855 The 1855 earthquake is the most severe earthquake to have occurred in New Zealand since systematic European colonisation began in 1840.
• M 7.8, Marlborough, October 16 1848 The earthquake that shook Marlborough on October 16 1848 was the largest in a series of earthquakes to hit the region that year.

Photo Gallery: View a gallery of images from these historic earthquakes.

More New Zealand Earthquakes

Other large earthquakes in New Zealand's history (most recent first):

• M 6.7, George Sound, October 16 2007 Fiordland was shaken once again by a large earthquake centred off the coast of the South Island.
• M 5.4, Lake Rotoma, July 18 2004 This earthquake shook up the Bay of Plenty area in July 2004.
• M 7.2, Fiordland, August 22 2003 This severe earthquake generated over 200 landslides and several small-scale tsunami on the South Island's west coast.
• M 6.8, Secretary Island, August 10 1993 The 1993 Secretary Island earthquake was reportedly felt as far away as Sydney, Australia.
• M 6.4, Weber II, May 13 1990 This earthquake was the second large shock to strike the Weber region in 1990, occurring 12 weeks after its predecessor.
• M 5.9, Lake Tennyson, February 10 1990 This earthquake occurred in North Canterbury near Lake Tennyson.
• M 6.7, Te Anau, June 4 1988 The earthquake that shook Te Anau in June 1988 triggered numerous landslides, and even cut the power to some southern towns.
• M 5.1, Waiotapu, December 15 1983 This earthquake reached its greatest intensities around Waiotapu and the Waikite Valley.
• M 5.6, Napier/Taradale, October 6 1980 This earthquake was felt most strongly in the Napier and Taradale regions.
• M 5.1, Waikato, December 5 1976 This earthquake struck the rural area around Korakonui, near the Waikato River.
• M 5.8, Seddon, April 23 1966 This shock was centred near Cape Campbell, but was felt as far away as Hokitika and Taranaki.
• M 7.1, Arthur's Pass, March 9 1929 This earthquake toppled chimneys and furniture in the Arthur's Pass area.
• M 7-7.5, Cape Farewell, October 19 1868 This earthquake caused damage to houses and roads around the Farewell Spit area.

ENDS