PM Key to talk to CEOs of NZ's 40 biggest companies on possible assistance package

Prime Minister John Key has told a news conference at the Beehive that the economic support needed after the Christchurch earthquake on Tuesday would need to be broader than support given after the September 4 earthquake.

Key also said the government would revisit its forecasts for a return to budget surplus within the "next few weeks". Before the earthquake the government was forecasting a return to surplus by 2014/15, which was a year earlier than it had forecast late last year.

He also reshuffled the portfolios of Gerry Brownlee so he could focus on being the Canterbury Earthquake Recovery Minister.

Key will talk later today with the chief executives of 40 of the country's biggest companies in efforts to put together an assistance package following Tuesday's deadly 6.3 magnitude earthquake.

The New Zealand Herald reports Key will hold a teleconference with the 40 CEOs to find out what help companies in Christchurch needed for their own employees, and what each company could offer in terms of the rebuild and assistance. Steps are expected to be announced on Monday.

Key said he would also meet this afternoon with Canterbury Employers’ Chamber of Commerce CEO Peter Townsend to discuss the economic impacts of the earthquake on the region.

'Clearly going to be some implications on govt's books'

The basic issues New Zealand faced, and the imbalances indentified in the economy, were as relevant today as they were last week, Key told media.

"So we need to become a more export-oriented economy, we need to have a higher savings rate, and we need to be more productive as a country. Whether it will have an impact on whether we return to surplus a year earlier than we thought, [or will have] some minor implications on our accounts, they’re issues we’re working through," Key said.

"We’re talking to Treasury about that. I’ve had some discussions with my people this morning – we’ll be in a position to flesh that out again, either through myself or the Finance Minister, in the next few weeks hopefully. Clearly there’s going to be some implications here, this has been a major earthquake. But in the overall direction we want to take New Zealand, it is exactly as it was, and we’ll continue to work hard to continue that," he said.

'Financial support to be broader and of a different nature to last time' 

In terms of what economic support would be needed, the difference between this quake and the September one was the length of time the big area cordoned off in the central business district would have to stay off limits, Key said.

"Last time we managed to get that cordon reduced rapidly, this time it’s likely to take a considerable period of time. We don’t know exactly, but you can imagine there are many businesses located in that area," he said.

"My sense of the economic support that the government will need to provide is that it will need to be broader and a slightly different nature to last time. It may incorporate some similar characteristics to last time, but I don’t think on its own that would be sufficient for the length of time that some businesses will be operating outside of the CBD."

Government was taking advice from Treasury and others, Key said.

“It’s important that we get that right. But again, my guess [for an announcement on support to be given] is in the early part of next week – if I was in a position to do that at post-cab [press conference] on Monday that would be great, but I can’t guarantee that,” he said.

Talk with CEOs

Key said the teleconference scheduled this afternoon with company CEOs was for an exchange of ideas and views.

“Because of the scale of what’s happened in Christchurch, and the significance of that as an economic zone for us, we need to keep close to our businesses," Key said.

"But it’s also a recognition that government can do an awful lot, and we are, but we’re not on our own. You’re seeing utility companies and private sector companies right across the country responding magnificently," he said.

"Air New Zealand’s a great example, Fonterra’s a great example, the banks have been tremendous, Watercare in Auckland. Anyone that can help is helping, I think people understand the magnitude [of the situation]. Let’s talk to them and see what’s possible. We want to try and put together some economic support for Canterbury. There are lots and lots of different factors in there, we just need to talk to them about what’s possible and what’s not."

Companies or government departments may be in positions where they could work together, Key said.

"I know this is not the normal course of doing business. But for instance, if you take government departments, we have ACC, [it] has its building in town, it’s a major building, it needs to moe out, it’s going to be out of there for quite a period of time," he said.

"It might be that we need to say to ACC, ‘look you need to work with other government departments that are moving out,’ because that CBD area is likely to be a very difficult environment to operate in for quite a period of time."

Disaster levy?

Meanwhile, Cabinet yesterday had not yet had discussions on a possible earthquake levy on those New Zealanders not in Christchurch, although Key pointed out that New Zealand already had a similar scheme in place with EQC levies.

“Our hope would be to not to have to do that, in that the one thing that helps us in New Zealand is because we have EQC, in a way we pay through that levy process, and Australia hasn’t had that," Key told media yesterday.

"So in a sense, we’ve preserved for this, if you like, or preconditioned for this. But we’ll have to take some advice on that in due course." Key said.

The Australian government is trying to impose a levy to pay for the costs of the Queensland floods - a A$1.8 billion 'temporary reconstruction tax' on middle and high income earners. See more in this news.com.au story here.

Reshuffle

See Key's statement below on the reshuffle.

Prime Minister John Key today reallocated some Ministerial portfolio responsibilities, for the foreseeable future, to allow Canterbury Earthquake Recovery Minister Gerry Brownlee to focus solely on overseeing earthquake recovery.

Mr Key says the scale of the earthquake which struck on Tuesday means that it requires the full attention of a dedicated Minister, and Mr Brownlee’s other portfolios have been reallocated to reflect that.

“There is a very big job ahead of us and it’s important we have a senior Minister dedicated solely to it,” Mr Key says.

“The Government is going to do everything it can to support the recovery and rebuilding of Christchurch.”

To assist Mr Brownlee in his role and to reflect the size of the recovery job, Maurice Williamson has been appointed as Associate Minister for Canterbury Earthquake Recovery.

Mr Brownlee’s other portfolios have been temporarily reallocated to other members of the Cabinet.

“Simon Power will be the Acting Leader of the House. David Carter will be the Acting Minister for Economic Development and Hekia Parata will be the Acting Minister of Energy and Resources,” Mr Key says.

“These changes have been made for the foreseeable future and will be kept under review as the recovery progresses.

“It is my expectation that all Government agencies involved in the recovery effort will work closely with Mr Brownlee.

“The Ad Hoc Cabinet Committee on Canterbury Earthquake Recovery, chaired by Mr Brownlee, will meet regularly to ensure active Ministerial coordination.

“Mr Brownlee will also have close working relationships with Civil Defence Minister John Carter and National Civil Defence Director John Hamilton to ensure that the Civil Defence and recovery and rebuilding work takes place hand in hand,” Mr Key says.

“As we move forward after Tuesday’s earthquake, the people of Christchurch and its surrounding areas can be certain that the Government is firmly focused on getting their city back on its feet.”

(Updated with videos, comments on CEO talk, Key comments on type of support needed, quotes from news conf on govt's books, comments from news conferences, reshuffle and picture)