Parliament

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

Gordon Campbell: On Why The Dice Are Loaded Against Women In Public Life

If they enter public life, women can expect a type of intense (and contradictory) scrutiny that is rarely applied to their male counterparts. If they are relatively young and conventionally attractive, such women will tend to be written off as lightweights – yet if they’re older and obviously competent, doubts will then tend to be raised about their “electability” and whether they are “warm” and “likeable” enough to connect with voters. Too conventionally feminine or not conventionally feminine enough? Too cold and too cerebral, or too warm and flighty to be seriously considered for high public office? For women in the public spotlight, the Goldilocks moments (when things are just right) are few and far between. More>>


 
 

PGF Kaikōura $10.88M: Boost In Tourism & Business

The Provincial Growth Fund (PGF) is investing $10.88 million to boost business and tourism opportunities in Kaikōura, Parliamentary Undersecretary for Regional Economic Development, Fletcher Tabuteau announced today. More>>

ALSO:

Whitebaiting: Govt Plans To Protect Announced

With several native whitebait species in decline the Minister of Conservation Eugenie Sage has today released proposals to standardise and improve management of whitebait across New Zealand. More>>

ALSO:

Education: Resource For Schools On Climate Change

New resource for schools to increase awareness and understanding of climate change... More>>

ALSO:

In Effect April: New Regulations For Local Medicinal Cannabis

Minister of Health Dr David Clark says new regulations will allow local cultivation and manufacture of medicinal cannabis products that will potentially help ease the pain of thousands of people. More>>

ALSO:


RNZ: New Year Honours: Sporting Greats Among Knights And Dames

Six new knights and dames, including Silver Ferns coach Dame Noeline Taurua and economist Professor Dame Marilyn Waring, have been created in today's New Year's Honours List. The list of 180 recipients - 91 women and 89 men - leans heavily on awards for community service, arts and the media, health and sport.
More>>

ALSO:

Gordon Campbell: On What An Inquiry Might Look Like

Presumably, if there is to be a ministerial inquiry (at the very least) into the Whakaari/White Island disaster, it will need to be a joint ministerial inquiry. That’s because the relevant areas of responsibility seem to be so deeply interwoven... More>>

ALSO:


 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 


 

InfoPages News Channels