Treasury Secretary says Canterbury earthquake likely to cost about NZ$4 bln in total

The Canterbury Earthquake could ultimately cost about NZ$4 billion, Treasury Secretary John Whitehead has reportedly said.

Both Fairfax's Stuff website and TV3's website are carrying reports quoting Whitehead.

According to Stuff, Whitehead said the NZ$2 billion figure previously used only covers the Earthquake Commission's liabilities. Treasury's estimate of the total cost to householders, insurance companies, businesses and taxpayers was, in fact, probably nearer double that.

The Earthquake Commission is advising that 29,678 claims have been received as at mid-day today, 24,390 from within Christchurch City.

"The cost faced by the EQC, individuals, and insurance costs will probably be of the order of NZ$4 billion," Mr Whitehead said.

In terms of the economic impact it was early days, "but the pattern of these is certainly a short term drop in activity of businesses being unable to function and ... there's always a risk of businesses failing.

"In the slightly longer term when you've got that reconstruction effort, a big amount of that going on tends to raise GDP (gross domestic product)."

But Mr Whitehead stressed that there were a "very wide range of estimates" on costs at the moment because officials were still to "get down to what's actually happened on the ground".

  

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11 Comments

God for 2010, give us Kiwis a nice, most needed Christmas present, import more money printing machines and this time make them accessible for the wider public in the big cities and please more slot machines for the rural communities - slide in one $ get $$ - great as a past time activity and to double the money.

What I noticed we businesses/ people increasingly earn less – the government get increasingly less revenue – but ask increasingly for more money from us -  and increasingly spends more.

We are increasingly.........

What is the url at the bottom of the photo? Would like to be able to see a bigger photo thanks.

Thanks for this.

Here the link: http://www.geonet.org.nz/earthquake/drums/ just click the region.

I'm sure the drop in property values is not included in this estimate and will be even more than $4 Billion

Chch had approx 150,000 houses at average price of $350K = approx $50B worth on 3rd Sept

If average selling price just drops 10% that's $5B less equity ... and prices could drop much more.

There are already a few places for sale on Trademe asking up to 40% below CV + $1 reserve auctions

http://www.trademe.co.nz/Trade-me-property/Residential-property/Houses-for-sale/auction-316345019.htm

http://www.trademe.co.nz/Trade-me-property/Residential-property/Houses-for-sale/auction-316344559.htm

 

I guess there could be a flood of bargins like this if aftershocks continue much longer.   e.g.

My cousin has bought her kids up to Nelson so they can destress + get some sleep   (their house is fine btw).

My boss (based in Chch) has taken his family to Brisbane for a week to recover (house pretty badly damaged).

My mother in law in Chch hasn't slept for 3 nights (no damage at her place).

When people are this stressed and exhausted some will just want out at any price - especially if they've lost jobs etc.

e.g.   5 years after hurricane Katrina the population of New Orleans has dropped by approx 20%

http://www.chicagotribune.com/news/sc-nw-0829-katrina-gfc.eps-20100827,0,4833461.graphic

Most of the reduction is due to low income people who were renting who left the city ... now there are around 40,000 empty houses in New Orleans.     I don't expect Christchurch will be this bad, but maybe population could drop by 5-10%

What do others think will happen to Chch population?

We have allocated time for you at the next paddock meeting anon....you will be able to show us all what it means to "get the hands dirty"...even the dogs are looking forward to that day. You will attend...won't you....please....it means so much!

Wondering just how good is the EQC fund? I remember they invested overseas when the NZ$ was 36c to the US$ and more recently I read that another proportion was in NZ Govt Bonds. These Bonds will be another debt on the NZ taxpayer!

Yep. You don't use the house you're insuring as equity to do so.

So the EQC will be mostly offshore.

Dear chchhomebuyer, And y. simy7Colin123Have they....?Anonymous, steven-orig2, Dean Left-us (broke), rc, Nutter, annonentity, Commonsense

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