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Christchurch rebuild cost sharing plan must be improved

MEDIA RELEASE

Monday 15 September 2014

Christchurch rebuild cost sharing plan must be improved

“The agreement between the government and the Christchurch City Council about sharing costs of the rebuild is due to be revised in December, as some costs are more accurately known now than they were originally,“ says Warren Voight, Local Body spokesman for Democrats for Social Credit.

“This is an opportunity to modify the agreement to make it more sensible.

“Forecasts based on current policies say that in two years time 20% of the Christchurch City Council's rates will be spent on interest, and that will continue to 2022 and possibly beyond. A Democrats for Social Credit government would, if elected, phase out the Local Government Funding Agency and allow all Local Bodies to borrow interest free from the Reserve Bank, which would save Christchurch ratepayers significant amounts.

“Two really expensive projects in the cost sharing plan are the convention centre and the stadium. Although the government is paying all the costs for the convention centre, that counts as part of its 60% contribution to the rebuild, so expenditure on this reduces what the government spends elsewhere.

“No businesses cases have been prepared for either of these projects, and the agreement locks the council into repeating Dunedin's disastrous mistakes with its stadium. You can't expect spectators to pay more to use a roofed stadium when it is not a more pleasant experience than a stadium with roofed stands for the spectators.

“These projects should not proceed unless properly prepared business cases show them to be good ideas, or they are modified in accordance with the findings of properly conducted research.

“Since not all costs are accurately known yet, the agreement should be reviewed at least once a year, so as to allow modifications as new information becomes available.

“The government and the Christchurch City Council have agreed the government will pay 60% of the total, and Democrats for Social Credit will, if elected, honour the agreement about that proportion of the total, although the exact numbers involved would be different.

“One effect of doing things this way would be that the council would not need to sell assets to finance the rebuild,” said Mr Voight.

ENDS


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