Adam Bennett

Adam is a political reporter for the New Zealand Herald.

Labour: Quake rebuild costs could shift on to taxpayer

The earthquake-damaged Christchurch CBD. Photo / NZ Herald
The earthquake-damaged Christchurch CBD. Photo / NZ Herald

Labour has raised the possibility of the taxpayer shouldering an even greater proportion of Christchurch rebuild costs, saying it would sit down with Christchurch Council to review the existing cost sharing agreement if it won the election.

In the latest of series of policy announcements for the quake-hit region which is shaping up as a key election battleground, Labour Leader David Cunliffe said a Government he led would be "committed to working alongside Christchurch's mayor and councillors to come up with a fair and sustainable solution to the city's ballooning debt, largely a consequence of a government imposed cost-sharing arrangement".

"There will be no set restrictions on the options that can be negotiated in these discussions."

The latest official estimate of costs to the taxpayer of quake recovery costs is $15.4 billion but Prime Minister John Key has indicated it may go higher.

The Government signed a cost-sharing agreement with the council in June 2013, under which it would pay $1.8 billion of the total $3.1 billion reconstruction bill for horizontal infrastructure such as road, water, wastewater and power networks while the council would pay $1.37 billion.

The council is also up for an additional construction bill of $423 million which includes its share of funding for so called "anchor projects" to provide the basis for the rejuvenation of the city.

However a KordaMentha report this year commissioned by the council has found the horizontal infrastructure bill could be $3.5 billion and $544 million for construction, leaving the council facing shortfall of $534 million or more.

The current cost sharing agreement has been a sore point between Mayor and former Christchurch East Labour Lianne Dalziel and Earthquake Recovery Minister Gerry Brownlee since Ms Dalziel was elected last year.

Mr Brownlee this afternoon said it was "disingenuous" for Labour to suggest the Government was not willing to listen to the council over cost sharing particularly for rebuilding horizontal infrastructure or roads, water, wastewater and power transmission networks.

"We anticipate meeting again with the council in the very near future to work through these very issues."

Mr Brownlee said Labour's "open ended policy" around cost sharing "puts everything back on the table and will remove the certainty around the anchor projects and central city, and subjects New Zealanders to an unquantified financial commitment".

"If Labour is committing to financial support for the council, taxpayers deserve more details."

Labour's Christchurch Port Hills MP Ruth Dyson said the existing cost sharing agreement had been struck behind closed doors between Mr Brownlee, former Christchurch Mayor Bob Parker and former Christchurch City Council chief executive Tony Marryat without any open discussion involving the rest of the city's council.

Since that agreement there was now more comprehensive information on a range of factors including insurance payouts

"What we're saying is given we know a whole lot of stuff more now, let's just sit down and talk this through again. We don't want anything that's agreed to be delayed because that would just defeat the purpose but we do want to give the council the chance to have a proper conversation in the light of robust information."

Asked whether such a discussion was likely to see higher costs for the taxpayer, Ms Dyson said: "We're not putting anything off the agenda... we're not going to pre empt things by saying x, y, and z is going to happen, we'll just wait until we have the conversation and see what anchor projects might be progressed with some urgency and what might not progress with some urgency or in a different shape."

Meanwhile, Mr Cunliffe said Labour would "restore the right of Cantabrians to make their own decisions about the future of their communities" by establishing a board to oversee the wind down of the Canterbury Earthquake Recovery Authority (Cera) and the transfer of its functions to local organisations.

A Labour Government would also re-instate Environment Canterbury the regional authority whose elected members were replaced with Government appointed commissioners in early 2010 following internal turmoil over freshwater usage policy. Two years later those commissioners had their terms extended for a further four years.

Ecan's future beyond 2016 is currently the subject an ongoing review with a discussion document scheduled for release after this year's general election.

Mr Cunliffe it was an "important step to restoring democracy in Canterbury" to have elected representatives restored "as soon as possible".

"That could mean an election as soon as 2015."

Mr Brownlee said "adding another layer of governance" to Cera would not speed things up or offer any new solutions, "and will in fact water down the Government's accountability for its $15 billion spend".

He said locals already had a strong voice in the recovery and pointed out "Cera employees are almost all residents of Christchurch".

As for Ecan, he said the Government had already signalled it would consult Cantabrians before making further decisions about its future.

"This consultation is planned to begin soon after the election. How can Labour claim they are listening to Cantabrians and simultaneously dismiss a planned public consultation process?"

- APNZ

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf01 at 28 Nov 2014 10:26:26 Processing Time: 449ms