90 seconds at 9 am with BNZ: English says more borrowing likely; Libyan chaos hits oil output; Irish electoral revolt may hit markets

Dont know about the 1in 500 year bit. From Memory, Wellington got hit in 1840, this quake lifted the present airport out of the sea and leveled the hills enough at Petone to build on. Napier quake was in 1931 and now Christchurch. In between some good quakes in other areas without as much loss to human life. Looks like a once in every 80 to 100 years we get a good quake.

Those bloody Irish , could sink the Euro yet , push Eurozone back into recession and stuff everything up for all of use yet .

The government must now decide whether to borrow overseas to help rebuild or impose an earthquake levy on local taxpayers. 

No, there is a third option - which requires neither of the above and is interest free;

http://sustento.org.nz/ 

Time we stood up as a nation and did this our way.

go the Irish...they've had a woeful deal, with taxpayers having to carry all the bad debt load from the banks....should have always been lenders to Irish banks taking some responsibility for the irresponsible lending over there.

With all the major damage covered by insurance and even EQC well covered by reinsurance,  let's hope all donated money to relief funds actually goes to the people most in need - how this will all be allocated will be interesting to see and let's hope very little is swallowed up with administration costs. Would be good to see some big donations from more of the nations rich listers - only one I have heard of is Owen Glenn. Has Sam Morgan donated yet?

No need for  a levy according to EQC chef. EQC is very well funded and reinsured, City council infrastructure damage is insured, so are the assets of the lines companies, etc, etc so an call for a levy is premature and most likely unecessary.

The EQC stil has $3 billion of assets as well as reinsurance contracts to cope with future disasters. The fund is expected to pay out $1.5b on residential homes and reinstating the land under them - after it has met the first $1.5b international reinsurers pay for the next $2.5b of claims.

EQC chief Ian Simpson says that despite calls for a rapid recapitalisation of the Natural Disaster Fund, the cover in place means that  a recap is not an immediate priority.

http://www.stuff.co.nz/national/christchurch-earthquake/4709216/EQC-holds-funds-for-two-more-quakes

and the City Council is also well and truly covered:

http://www.stuff.co.nz/national/christchurch-earthquake/4709213/NZs-biggest-insurance-claim-ever

Civic is the trading arm of New Zealand Local Government Insurance Corporation (NZLGIC), which is owned by 59 local authorities spread from one end of the country to the other.

Civic and the Local Authority Protection Programme Disaster Fund, an associated entity within NZLGIC, have insured Christchurch City Council's above-ground assets such as buildings and their contents, and below-ground assets such as sewerage and water reticulation networks.

Civic specialises in providing local authorities with all manner of insurance cover and although the cheque it hands over to the Christchurch City Council as a result of damage caused by Tuesday's quake is expected to be the biggest payout made by any insurance company to a policyholder in this country, most of the money is likely to come from overseas. Civic reinsures its business with overseas insurance companies that are expected to pick up most of the bill for claims arising from last week's tragedy.

Civic Assurance general manager finance Roger Gyles said he did not expect there to be any problems with the overseas reinsurers meeting their payment obligations because the companies Civic reinsured with all had A (excellent) or better ratings.

and government etc:

Utility providers also covered for earthquake damage and the government no doubt covered for damage to schools, Housing NZ properties, infrastructure etc.

What will be needed is at least a 0.5% to 1% cut in the OCR and maybe further tax cuts in order to stimulate us out of recession 2.

I think government needs international help as JK said as the costs is going to be far too much for NZ. Here is an example..no insurance in CHC for at least 6 months (Car included) , 18 Schools with serious damage (will they have NCEA in canterbury this year?) , 50 thousand workers displaced, a number already told there jobs have gone, estimate 8 thousand homes completely gone (where do they go in between), thousands Kilometers of roading gone , two major Malls destroyed, to try and get your head around this and the cost is mind blowing. 

A third earthquake in large magnitude is highly likely. It appears NZ is now entering a time of great tectonic activity. The chances are high. Like domino's  one serious event can lead to many others. I think Key and Bill and Bob better start getting real about this situation.

Imagine how much better CHCH would of been had every home been as independent of city infrastructure as possible. From independent power sources to independent sewage (composting loos) and water collection or water wells. Too constantly spend billions on primative infrastructure that will only fracture everytime we have these events just seems utterly stupid. Off the grid homes make so much sense in such prone places do they not?

As for liquifaction,building a city on what was originally wetlands and old river bed was not the best idea in hindsight.

FCM - we cannot let the government get away with a levy when the bulk of the quake damage is covered by insurance. Even the EQC chief and City Council are quoted as saying they have ample insurance.

If they keep talking about a levy then less people will be inclined to donate funds.

Perhaps they should reverse last years tax cuts or not have created them in the first place?

FYI,  a statement out from Perpetual Group this morning:

"As a consequence of the Christchurch earthquake on 22 February, Perpetual Group’s Christchurch offices have been destroyed with 10 team members trapped inside.



Our first priority remains the health and safety of all our team members and their families. We are actively working on full support for those people.



New premises have been secured and will be operational from Monday 28 February. The Premises are alongside PGG Wrightson in Waterloo Rd, Sockburn, Christchurch.



Perpetual’s business continues with fully operational backup systems for records and business systems. Our eight other offices nationally have been allocated service tasks to remove the load from Christchurch until the local office is fully operational again. These offices have teams of client consultants and advisors that will provide full services to Perpetual’s Christchurch clients.



Perpetual has been in business for over 125 years and our team are very determined to overcome this dreadful experience."

Justice - you are onto something there -  rainwater collection tanks, solar water heating, large twinpack bottled gas systems instead of mains, composting toilets, etc should all be mandatory in the rebuild process along with steel framing and lightweight roofing (ie no more tiles) in homes and limiting the CBD to two or three storey construction. Maybe a generator should also be part of every home.

meanwhile across the ditch

"RBA's McKibbin warns on global price bubble

Published 7:17 AM, 28 Feb 2011 Last update 7:17 AM, 28 Feb 2011

QUICK SUMMARY | FULL STORY | ECONOMY

Reserve Bank of Australia board member Warwick McKibbin has warned Australia might be caught in a global bubble that could inflict more damage than the global financial crisis.

According to The Australian, Professor McKibbin says the current bubble in Asian property and commodities markets – once burst – could end Australia's record high terms of trade and push down the dollar. This would see the central bank under pressure to fight inflation by raising the official interest rate despite falling export prices.

"This is shaping to be much bigger than 2004 to 2007," he said in comparing the new excess of global liquidity with the recent bubble, which led to the worst global financial crisis since the 1930s.



Professor McKibbin further suggested that the bursting of the bubble could challenge the government's budget.



The RBA holds its monthly policy meeting tomorrow and is expected to keep the official cash rate on hold at 4.75 per cent, following the surge in oil prices after a week of political instability in North Africa and the Middle East.

dead right justice,reconstruct 100% kiwi-made.all unemployed,local materials,redesign cbd.salvation army are my choice.the cost of disasters need to be deflated!!otherwise it"s a lolly scramble.

The CHCH earthquake is another to add to the pile...let's look at it together...somehow the Govt has to fund leaky homes, SCF & two earthquakes..ouch it's not looking good, especially when the fiscal deficit is running at $13 Billion per annum..taxes will have to increase and this years budget will be a tight one...and throw in the fact that China and Aus have unbalanced economies and will most likely cause problems in the medium term...Interesting times.

Beware of  Codex Alimentarius.

Consumers need to start thinking as CITIZENS.

Good on Ireland, they should do the same as Iceland, tell the PRIVATE BANKERS to F#$% OFF!

CO, I was talking to a mate who works in the meat industry, he thinks we are only 2 years off all cutting being done in China or Korea(Talleys who own Affco already get their fish prcessed in Sth Korea). Its the only way we can stay competitive, he thinks the move may start quite soon. Think of the job lossses. Would invole thousands of people. Idiots like Acc charging Affco 1 mil to cover the 'work related' injury to a gang member shot in the car park, come home to rost and we all get a little poorer, untill we get to a tipping point.

 "He also said the government would struggle to handle a third such 1 in 500 year earthquake."

Go back to school Bill....at least try to learn some history on quakes in NZ....

....1 in 30 sounds more accurate.

These events are the very reason several decades of govt ought to have done a dam sight more than set up the EQC and make sure they were safe inside the Beehive built to cope with an 8.2. Bugger all else in wgtn will be left standing.

It is also the reason why this economy should not have been allowed to deteriorate to the point where a disaster threatened the entire country....we have Beehive buffoons to thank for that.

So where are we now....already deeply in private debt and being farmed by the banks....with a govt hell bent of borrowing heaps....risking a downgrade and higher rates as a result...leading to a deeper recession....a fiscal hole into which the economy is falling fast....but heaps of spin about the tradeables sector saving us all....great things to come....just round the bend....chin up....stay cheerful. Then along came the Chinese with austerity and a decision to put the dragon's boot on the brake. Bugger.

No worries right Bill....just hype the spin....change the wording....and carry on dishing out the half million dollar salaries paid for by taxpayers....Where would we be without our very own club of Sir Humphreys?

BH...please could you post the list of civil servants on the top three pay scales showing what they collect.

I see comments on BH's article in the Herald that call on Bollard to cut and cut big...to save the economy!...so little is understood by so many on this score....targetted govt aid to Chch is required...not a free for all burst of cheap credit for all who would get some...most wouldn't...the banks would not cut by the same amount and only those on floating would benefit...yet everyone would cop a thrashing at the pump and in the shop as prices jumped because the Kiwi$ would drop and imports cost more...

A cut would steal from those who saved...those who didn't do a credit based splurge...and encourage savers to move capital offshore whenever the Kiwi$ blipped up....already the rates in aus are better than here....

So who would gain....the exporters would see more Kiwi$ but many hand it directly to a bank and the ones with "lazy balance sheets" would invest it...probably offshore.

I suspect the reason for the way many people think is they read the word "cut" and they translate that into a better deal for them on their debts...while not thinking about the extra cash they will give the petrol companies plus gst and carbon tax on top....