Liam Dann: Double downer casts long shadow

Christchurch's latest aftershocks, and Chile's volcanic ash, have put an unwelcome ingredient in the RWC success mix - uncertainty. Photo / Greg Bowker

What do you do when the bad news just keeps on coming? Canterbury's tectonic plates refuse to stop menacing its residents and the fallout continues to play economic havoc with the nation's recovery plans.

The exact impact of the shakes on Monday is a big unknown, with initial estimates of fresh costs at $6 billion quickly dismissed by the Prime Minister.

He's probably right about that. Intuitively the number seems too high compared to estimates for total damage thus far, at about $15 billion. Clearly a lot of damage done this week will overlap that which has already been counted.

Sorting through the wreckage to accurately assess new costs will take a long time and is unlikely to be worth the effort. We may not get a final figure as, sadly, it looks like there'll be more significant aftershocks before this event can be called at an end.

That kind of assessment from geologists - who say Monday's shocks actually raise the odds of another magnitude 6 quake in the next few months - must surely put a spanner in the works of economic forecasts that were predicated on earthquake rebuilding boosting GDP in the second half of this year.

Everything about fixing Christchurch now looks like it's going to take longer than first thought.

From the Cathedral to the liquefied properties in the eastern suburbs, Monday's quakes were a reminder that this is still a live event.

What does that do to Reserve Bank forecasts which the market last week interpreted as leaning towards a rate rise in December rather than early next year?

Well, already the market has put the odds back in favour of a 2012 start to rate rises. Further shakes and delays to the rebuild will only add weight to that view.

If the recovery was to be driven by the twin engines of Christchurch rebuilding and farmer spending on the back of high export prices, then it's all eyes on Fieldays at Mystery Creek.

New Zealand hardly needs more bad news on a geological front, but we also have this literal black cloud on the horizon in the form of ash from a Chilean volcano.

It came and it went this week and the disruption to travellers - particularly those on Air New Zealand - was not much worse than a day or two of bad weather.

But bad weather delays don't make news stories around the world as this event did.

Also, Qantas is making a much bigger deal of it all and that will create more uncertainty around travel in Australia - probably our most important tourist market right now.

The ash cloud may or may not grow into a major problem. Perhaps it will involve nothing more than a couple more days of delayed flights.

But it's hanging there, creating uncertainty in the minds of travellers contemplating a trip to New Zealand.

That uncertainty effect has to be a worry for organisers of the Rugby World Cup, although you can hardly blame them for refusing to comment on hypothetical problems.

They have to remain focused on the positive.

The Rugby World Cup is increasingly being seen as some sort of economic light at the end of the tunnel for New Zealand business. That it might be cruelly undermined by another natural disaster doesn't bear thinking about.

Nevertheless, the organisers will need to be thinking about it. The last two big eruptions of the Puyehue-Cordon Caulle volcano - in 1960 and 1921 - lasted about two months.

It's not unreasonable to plan for something similar. That won't mean airports shut down every day for two months but it might mean several more days like Wednesday and Thursday. It will certainly plant another seed of uncertainty in the minds of potential cup tourists and that's the real risk.

RWC organisers say the last big push to sell tickets gets under way on July 4.

With any luck, the ash will be yesterday's news by then. But if it's still with us, it will be a very real fly in the ointment.

The importance placed on the cup as an economic and cultural event to change the fortunes of the nation has already reached a level that will be hard to live up to, even under the best conditions.

So, what do you do if the bad news keeps coming?

Well, we look to our leaders. Those we have elected to make big decisions on our behalf are gearing up for election campaigns and that tends to highlight the best and worst politics has to offer.

This year we need the former. It's a year for leaders on both sides of the political spectrum to steer clear of the petty stuff and remind New Zealanders this run of lousy news will end.

We need some vision for 2012 and a bold road map for recovery. Only those who can deliver that will deserve the the electorate's support.