A billion dollar estimate on the High Court’s ruling that the Earthquake Commission is liable for thousands more payouts is hopefully a worst-case scenario, Finance Minister Bill English says.
The ruling that EQC could not cap homeowner’s payouts at NZ$100,000 a year if they sustained damage from multiple earthquakes would feed into a review of the EQC model, although the government was not focussed on that review right now.
The news came in the same week as the government announced a NZ$4 billion cost blowout for EQC after new estimates on the cost faced by its NZ$6 billion disaster fund raised the expected cost to NZ$7.1 billion, meaning the government would be required to cover the shortfall.
“I’d like to think that would be a worst case, about a billion, but EQC are sorting through the costs now,” English told media in Parliament on Tuesday morning.
The government would have a better picture of the cost over the next few days.
“I think the important thing is that we get as much certainty about insurance issues in Christchurch as we can, as soon as we can,” English said.
“Either way, it’s just about whether the insurance falls with the private insurers or with the EQC. It doesn’t affect claimants at all,” he said.
The ruling was another example of the EQC legislation being “a bit unsatisfactory” when it was put to the test.
“However, the law is what it is, we have to pay out under the law as it is, and it will feed in to a future review of EQC. We need to have some clearer boundaries and clearer expectations,” English said.
The government had a growing list of issues that needed to be considered regarding a review of EQC, but had not come to any conclusions.
“I think it’s important that we focus right now on just getting people’s claims paid out under the law as it is, and not clouding the picture with speculation about what might happen in the future,” he said.
(Updates with video)
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