Finance Minister Grant Robertson has called for some "challenging conversations" about where and how to rebuild billions of dollars worth of infrastructure destroyed by Cyclone Gabrielle, along with who should pay for it and what form it should take in a warming climate where storms and droughts are more frequent and intense.
Robertson described climate change as any finance minister's "defining dynamic" now that 1-in-100-year climate events were more regular.
Speaking at length for the first time since Cyclone Gabrielle killed at least five people, destroyed roads and bridges, made 10,000 homeless and cut off power to nearly quarter of million homes, he said the Government would use its balance sheet to borrow to help pay for the billions of dollars of repairing and rebuilding in the devastated areas of Hawke's Bay, Gisborne, the Coromandel and Northland.
But he said the increasing frequency and intensity of storms and droughts because of climate change was changing the landscape for the Crown, councils, businesses, insurers and bankers alike.
Robertson told an Auckland Chamber of Commerce lunch that climate change was now the “defining dynamic” and “vital” for him, and it would be for future Ministers of Finance.
“Whether they like it or not, it will be the defining dynamic for every Minister of Finance who delivers this speech in the coming decades," Robertson said.
"Climate change is here. It is affecting the economic security of our country, our communities and our families, and it's not going away anytime soon," he said.
"There is no point in talking about one in one hundred year events any more. We will be dealing with them regularly."
Managed retreat and not just building back in the same way and place
Robertson said there would have to be challenging conversations "about where we live, what infrastructure we build, how do we mitigate and put in place resilience measures. And who pays when it goes wrong. And two words that you will hear a lot more over the coming months and years. Managed retreat."
"These conversations are extremely challenging. They're about our way of life. The worst thing we could do, in response to the devastation we've seen over the last couple of weeks, is simply rebuild straightaway without thought about whether or not that is the right thing to do. That's enormously challenging and difficult."
Help for the uninsured
Robertson said he expected the Government would have to help those who had not insured their homes or the contents of their homes.
He said it was now time to take stock of the infrastructure deficit and dealing with climate change.
"I think we've got to look at that broader and bolder. And for me, that is about a long term infrastructure pipeline that is agreed across our society, and that we fund it by making use of the government's balance sheet. And by working with the private sector, with iwi, with local government, to actually have the level of investment New Zealand needs."
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"Robertson said he expected the Government would have to help those who had not insured their homes or the contents of their homes."
It's a tricky one, where's the incentive to purchase insurance if the taxpayer is there backstopping everything? Would it be better for the hard up to have some of their benefits paid directly towards contents/house insurance.
A perfectly reasonable stance to take there greatwhiteshark, hence why I called it a "magnanimous" move.
As a renter the government bailing out the uninsured would disadvantages me, should I want to enter the property market.
Saying that this is a national disaster. I live in Christchurch and without help from central government our city would still be rooted [granted ChCh had insurance lol].
As such I'm not going to argue against giving aid and comfort to my fellow countrymen, even if they are North Islanders :).
Also, there could be liable cases against councils and forestry businesses - people not having insurance doesn't negate that.
It's a tricky one alright.
Do local and regional councils get to rely on private insurance to bail them out of any liability when as rate payers we rely on them to identify and complete necessary works programs that would mitigate a lot of the damage done? Or enforce the necessary legislation and force businesses to not add risk of greater impact in certain areas?
Robertson described climate change as any finance minister's "defining dynamic" now that 1-in-100-year climate events were more regular.
I'm sorry but 1-in-100-year climate events cannot become "more regular." It's mathematically impossible.
This is your Finance Minister who has a terrible mastery of the English language or is simply inept.
"There is no point in talking about one in one hundred year events any more. We will be dealing with them regularly."
And now cosplaying as Nostradamus.
Pffffffffffffffffffffffffffffffff
https://www.wgtn.ac.nz/explore/postgraduate-programmes/master-of-climat…
Master of Climate Change Science and Policy – MCCSP
The global threat of climate change is real and urgent. Gain insight into climate change challenges in science and policy-making with this multi-disciplinary degree.
Sure but is New Zealand then best to continue to spend its money and restrict itself economically, to reduce the ripples it is generating or spend said money instead, protecting itself from the incoming tidal waves the huge industrial nations are generating? Just asking!.
He's actually quite correct. Except that we will get more than one a year (just have) and so '1' is an inappropriate number on that side of the equation. '3 in' might be a more accurate prefix
Quite astounded to see this comng from you Power. Thought you were far better than this.
rain fall. If you have 25 years worth of records then the 1:25 is the maximum of that set. 1:50, 1:100 ..... are extrapolations based on a regression analysis.
Flood level will be tied to rainfall but there'll be some other variables as well. There is an analysis based on maximum possible rainfall via some theoretical analysis of clouds, terrrain and other variables. This is the gist of it. Someone else more knowledge can elaborate.
Ror the first auckland storms, they were compared the rainfall to records from 1869
nigelh
Estimates of the 100 year risk do not require 100 years of records.
That is not how they re calculated.
However, the calculation models are assumption-based and there are good reasons to believe that many 100-year estimates are under-estimates because of specific statistical assumptions.
KeithW
Grant Robertson probably has read the IPCC Summary for Policymakers.
https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC_AR6_WGI_SPM.pdf
Small changes in mean and standard deviation dramatically change the probability of extreme events.
Same old Kiwi process. It's expensive - so lets look around to see who else can pay for it.
The go to answer is borrow and put it on the grandchildren.
We need to be real as a country. Things cost and we need to pay for them. So be more productive and produce some earnings to pay for things. Not been a priority in recent decades.
Or go without many of the things we take for granted now, like quality health services and infrastructure. Welfare. Acknowledge we are a poor country
I guess we will just continue to say central government will have to pay, because we can't, and Grant Robertson and his successors will borrow like maniacs.
If the weather pattern in coming years allows tropical cyclones to directly hit NZ this is going to become semi annual...... multiple cyclones are formed every year, in the past they have tracked towards Aussie, now they seem to be tracking towards us more.... last year a few slid past east cape offshore. could be a 1 in 10 year or 2 in a year scenario, who can predict the weather.
If the weather pattern in coming years allows tropical cyclones to directly hit NZ this is going to become semi annual...... multiple cyclones are formed every year, in the past they have tracked towards Aussie, now they seem to be tracking towards us more.... last year a few slid past east cape offshore. could be a 1 in 10 year or 2 in a year scenario, who can predict the weather.
To do this, you need to start from a base case as to why and how this pattern will emerge. Like any prediction of future events, it must also include the principle of falsifiability.
All Robbo has to do is lay it out. It gives him credibility.
The problem is, not many areas of NZ could have coped with the rainfall that hit inland Hawkes Bay / Gisborne etc.... It would have looked just as bad if it hit most major NZ cities. We have now had Nelson, Westport, Napier , Hastings, Gisborne, Auckland, Northland all in the last 12 months.
Rural on rolling hills is now probably safer than city or town. So Powerdownkiwi, what should we do? Re entropy, are you assuming these chaotic storms produce way more energy then what we are used too? and this additional energy is a DIRECT result of increased temp so the atmosphere is like a fluid dynamics system where we have turned up the temp?
Good question(s)
I'm also watching the increasing precariousness of energy-supply - not Marsden Point is gone, and the roading network was ALREADY decaing markedly, before this.
We need to focus on local resilience - the capacity to go it alone. Water-tanks should be retro-mandatory; food-systems have to be re-thunk.... generators are only good with fuel, so it goes. This is a compound problem.
Might also checkout The Milankovitch Cycle- Nasa have an excellent site that's simple enough for even Grunter to understand with help from Niwa. however like most of Grunters history he's good at identifying problems but useless at implementing solutions that work.
While the government wishes to dabble with the fallout from moral hazard when it comes to property insurance, I wish it would put a brake on the cost increases accruing to my council rates bill for the "nice-to-have" frivolities.
Financial headache getting worse for Hutt City Council
The financial pressure is mounting on the Hutt City Council as the cost of major infrastructure projects goes through the roof.
A 24% increase in the cost of bulk water and a $50 million increase for the 4.4km shared pathway in the Eastern Bays are just two of the items putting council budgets under pressure.
Why can't government instruct central bankers to instruct bankers to throttle loan volumes extended to residential property speculators?
On our planet earth – as opposed to the very different planet that economists seem to be on – all markets are rationed. In rationed markets a simple rule applies: the short side principle. It says that whichever quantity of demand or supply is smaller (the ‘short side’) will be transacted (it is the only quantity that can be transacted). Meanwhile, the rest will remain unserved, and thus the short side wields power: the power to pick and choose with whom to do business. Examples abound. For instance, when applying for a job, there tend to be more applicants than jobs, resulting in a selection procedure that may involve a number of activities and demands that can only be described as being of a non-market nature (think about how Hollywood actresses are selected), but does not usually include the question: what is the lowest wage you are prepared to work for?
Thus the theoretical dream world of “market equilibrium” allows economists to avoid talking about the reality of pervasive rationing, and with it, power being exerted by the short side in every market. Thus the entire power dimension in our economic reality – how the short side, such as the producer hiring starlets for Hollywood films, can exploit his power of being able to pick and choose with whom to do business, by extracting ‘non-market benefits’ of all kinds. The pretense of ‘equilibrium’ not only keeps this real power dimension hidden. It also helps to deflect the public discourse onto the politically more convenient alleged role of ‘prices’, such as the price of money, the interest rate. The emphasis on prices then also helps to justify the charging of usury (interest), which until about 300 years ago was illegal in most countries, including throughout Europe.
However, this narrative has suffered an abductio ad absurdum by the long period of near zero interest rates, so that it became obvious that the true monetary policy action takes place in terms of quantities, not the interest rate.
Thus it can be plainly seen today that the most important macroeconomic variable cannot be the price of money. Instead, it is its quantity. Is the quantity of money rationed by the demand or supply side? Asked differently, what is larger – the demand for money or its supply? Since money – and this includes bank money – is so useful, there is always some demand for it by someone. As a result, the short side is always the supply of money and credit. Banks ration credit even at the best of times in order to ensure that borrowers with sensible investment projects stay among the loan applicants – if rates are raised to equilibrate demand and supply, the resulting interest rate would be so high that only speculative projects would remain and banks’ loan portfolios would be too risky.
The banks thus occupy a pivotal role in the economy as they undertake the task of creating and allocating the new purchasing power that is added to the money supply and they decide what projects will get this newly created funding, and what projects will have to be abandoned due to a ‘lack of money’.
It is for this reason that we need the right type of banks that take the right decisions concerning the important question of how much money should be created, for what purpose and given into whose hands. These decisions will reshape the economic landscape within a short time period.
Moreover, it is for this reason that central banks have always monitored bank credit creation and allocation closely and most have intervened directly – if often secretly or ‘informally’ – in order to manage or control bank credit creation. Guidance of bank credit is in fact the only monetary policy tool with a strong track record of preventing asset bubbles and thus avoiding the subsequent banking crises. But credit guidance has always been undertaken in secrecy by central banks, since awareness of its existence and effectiveness gives away the truth that the official central banking narrative is smokescreen. Link
It’s reassuring that we have a moron dealing with this that does not understand the cause and effect part of this.
first action should be reverse the greens rule about burning slash. Slash took out all the Bridges.
make sure all the infrastructure in insured correctly. If not, fire everyone involved.
admit that infrastructure we not maintained and not up to it.
stop the two year study into whether the Tongan volcano caused this. NASA already told us this is true, and the Australians. No use spending two years studying it using a bunch of loons that will only eventually just agree with NASA because they are right.
get on with fixing it and making it right because it is your job to do it, dont make excuses and blame climate change which has nothing to do with it.
this guy loves lamingtons, but is scared of fast moving ones. He has wasted heaps of money on nothing in the last few years, and we can’t let Him do it again.
Reposting some links for anyone who's interested.
https://freewestmedia.com/2023/01/05/volcanic-eruption-in-tonga-will-co…
https://www.abc.net.au/news/2023-01-11/sydney-in-longest-spell-below-30…
Catabolic collapse
" The basis of that theory is the uncontroversial fact that human societies routinely build more infrastructure than they can afford to maintain. During periods of prosperity, societies invest available resources in major projects—temples, fortifications, canal or road systems, space programs, or whatever else happens to appeal to the collective imagination of the age. As infrastructure increases in scale and complexity, the costs of maintenance rise to equal and exceed the available economic surplus; the period of prosperity ends in political and economic failure, and infrastructure falls into ruin as its maintenance costs are no longer paid."
Couple of points....money is not output, and banks create 'money' (credit).
But even if the US printed infinite 'dollars' they (or anyone else) still cannot maintain existing infrastructure if the resources dont exist (in the quantity required)...resources being materials, labour, capability....and all that is underpinned by energy (and time)
What utter bullshit!...
everybody is calling this Esk valley flooding . ..
"The worst ever!"
" A one in 100 year event"..
In April 1938. The flooding was 3x worse with 3 metres of silt and 10 meters of water!!!!
Read it here
https://hwe.niwa.co.nz/event/April_1938_Gisborne_and_Hawkes_Bay_Flooding
https://collection.mtghawkesbay.com/objects/95629/esk-valley-flood
https://www.nzgeo.com/stories/inundated/
the press in this country are just over zealous morons who do no research before blabbing off!
Stuff do mention the 1938 flood and 2018 flood in an article today ... https://www.stuff.co.nz/national/300810300/cyclone-gabrielle-was-the-ca…
Cool that you are here.. i live in an area prone to 100 year floods. I didnt take out any insurance for any of my cars , house or business. Didnt bother to check risks or pay as labour has my back..
Anyway - this weeks 100 year weather event has done everything in. Would you mind to ask grant to deposit a couple of $mill into my account... the same one he used to pay me all the pandemic cash and cost of living payment and where he puts my my benefit moneys.
ps. Please let him know please that I am thinking of getting one of those clifftop houses on the north shore next... the ones with those nice yellow stickers are are cheap at the mo - but i assume he will bail me out when it finally slips in next weeks 100 year weather event.
Pps tell grant i love his work. he is so easy with all the cash.. i guess the kids will just have to graft to pay it back . Lucky it wont affect ne.
ps. Can someone tell me why some peeps pay insurance and work soo hard to fund grands lolly jar... when they could just sit around like all us lot and live on all Grants generous handouts handouts :)
Huge borrowing differential cf ORCD average and pathetic subservience to asset holders re no or low tax on gains means v big deficit re infrastructure means tax has to go up children. Things are not free and government is necessary as private sector will not fund it. Time to cough up grown ups and National don’t believe in government and hence are useless
Lets be reminded of how Robertson and Ardern operated during covid and how the economy was put into this situation, lets not forget how they work economically and why you cannot trust Robertson with money.
Lets remind ourselves of the debt we have incurred for a net "negative "result,
From Bob Jones...
When I suggested recently that the media ask Chris Hipkins, why given our current record covid infection numbers and deaths, if it was a good idea to throw the country into a ludicrously punitive lockdown in 2020, 2021 and 2022, it’s not now?
Some readers wrote saying now everyone who wants to be is vaccinated. But that was also the case in 2021 and 2022 (Auckland remember, was closed down until late last year).
Here’s the latest Health Department statistics. 2.2 million New Zealanders have now had covid.
Last week that number rose by 8,400. A total of 2513 people have died. These statistics make a mockery of the situation in 2020, 2021 and 2022 and the much vaunted elimination claim.
The lockdown oppression years were the most disgraceful event in New Zealand’s history. They had Orwellian Big Brother overtones, were a massive abuse of political power and frequently downright sadistically cruel.
Flogging an infantile advertising message in the media and on our highways to “Be Kind”, the government authors of this hypocritically didn’t apply it to their own actions, for example, denying the right for people to visit their dying partners a mile away in hospital. I could go on but the salient point is instead of trying to puff up Hipkins, such as with the “Chippy” nonsense while constantly rubbishing the National leader, how about the lap-dog media asking Hipkins why, if it was right to impose a draconian lockdown on the nation over the past two years, is it not right to do so now?
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