The Government is courting Asian sovereign wealth funds for cash to fund the rebuilding of Christchurch's quake-battered CBD and infrastructure, says Earthquake Recovery Minister Gerry Brownlee.

Today's Budget is unlikely to include significant new information about the rebuild, but will offer "a reconfirmation of where we're at, and our long-term commitment", Mr Brownlee said yesterday.

"You can say that for the next five years the New Zealand economy will benefit from the stimulus that the rebuild in Canterbury will achieve," the minister told the Herald.

"You've got at least $20 billion of new money coming into Canterbury as a result of insurance payouts and everything else."


But more than that, Mr Brownlee said, "outside investor" interest in the the rebuild was strong.

Those investors were "coming to town to have a look" at the moment, and included a number of sovereign wealth funds that invest on behalf of their governments.

During his recent visit to Singapore, Prime Minister John Key had initial discussions about Christchurch real estate and infrastructure investments with that nation's Temasek sovereign wealth fund.

Furthermore, after the recent visit by fourth-ranked Chinese leader Jia Qinglin, "his people said yes, there's stuff they would be interested in", Mr Brownlee said.

Details of foreign investment would firm up as plans to rebuild the central business district were announced.

But for some residents, particularly the small number in Christchurch East still using Portaloos, the Christchurch recovery is slow in coming.

That is reflected in the figures for the Government's spending on the rebuild despite Mr Brownlee last week saying it was "on track and hitting its stride".

Last year's Budget estimated the Crown would spend $2.81 billion on the recovery during the June 2011 financial year but the Pre-election Economic and Fiscal Update in October last year showed it had spent just $1.6 billion.

But Mr Brownlee said there were "very practical reasons" for the rebuild spending being slower than expected.

"Every time you get a big quake over five then you go back and there's a whole round of reassessments."

Those aftershocks also lift the size of the total bill. The December 23 quake last year added about $450 million to the Government's forecast quake expenses, which were already running at $13.5 billion including the Earthquake Commission's $8 billion.

But on the other side of the ledger, with more owners than expected of red- zoned homes choosing "Option Two", which means the Government buys only their land, Mr Brownlee indicated the $847 million total cost of the red- zone package may be reined in.


Today's Budget may contain some good quake-related news in the form of a lower taxpayer bill for the AMI Insurance bailout.

The Government's backstop for quake-stricken AMI threatened to saddle the taxpayer with a bill of $1 billion or more, Finance Minister Bill English said in April last year.

But a few weeks later, in last year's Budget, Treasury had set aside a $500 million contingency to cover the shortfall between AMI's quake-related claims and its reserves and reinsurance. By October, that contingency had shrunk to $335 million.

Since then the Crown has overseen the sale of AMI's healthy business to Australian company IAG while retaining its Christchurch liabilities and the reinsurance contracts to cover them, renaming the Canterbury unit Southern Response.

Before the April deal with IAG, AMI had paid out around $300 million in earthquake claims. Over five years, it's estimated Southern Response will settle a further $1.5 billion.

The new state-owned company will firstly use the available reinsurance cover AMI had in place for each earthquake event to settle earthquake claims with additional funds coming from the $380 million IAG paid for the rest of AMI and other retained assets.

Yesterday, Earthquake Recovery Minister Gerry Brownlee indicated the final bill to the taxpayer may be substantially lower than $335 million, depending on reinsurance payouts.