Editorial: A focus on funds for cyclone recovery fixes

Cyclone Gabrielle has destroyed significant parts of the North Island, including Esk Valley near Napier. Photo / George Heard

Opinion

The Beehive must seem like a bunker for New Zealand’s political leaders after the storm pressure of the past weeks.

At the weekend, a Waihī tornado added to the expensive trail of destruction and misery wrought by Cyclone Gabrielle and a string of intense storms.

The political calendar has key dates circled in May for the Budget and October for the election, but the political heat won’t ease and neither, probably, will nature - last year’s major floods in Nelson and Tasman occurred in August.

But for now, with clean-ups moving towards cost-counting, providing immediate support and working out funding for recovery fixes is the focus in Wellington.

There will be plans and a lot of detail ahead on how to make recovery steps with climate mitigation and adaptation in mind. This will require input from people in regions including local authorities, community groups and businesses.

However, to gain the extra revenue for a major part of that work, Prime Minister Chris Hipkins and Minister of Finance Grant Robertson first need a few bold, simple ideas that can be easily understood and which will endure.

Robertson has refused to rule out a flood levy/tax, saying: “What I’m doing is the responsible thing to do. We still don’t know the full scale of this event, we’ve got to work that out, then we have to work out how to pay for the Government’s contribution.”

National Party finance spokesperson Nicola Willis drew a link between the cyclone tax question and whether “New Zealanders suffering a cost of living crisis” should be made to pay more.

Despite the politics surrounding taxes, there is precedent for a levy, and it’s the kind of measure that should be considered since extra funds have to be found, and climate disaster threats are ongoing. Last year was a record one for insured losses from extreme weather events of $350 million.

There are also a lot of people badly hit who are looking for relief, and other Kiwis can see the need for it.

Treasury secretary Caralee McLiesh told Parliament’s finance and expenditure committee the affected regions “contain approximately half of New Zealand’s residential dwellings and account for almost 60 per cent of GDP and population”.

The importance of good roads has been obvious as communities have been cut off in storms. In reference to closures from slips on State Highway 1, Hipkins told Northland local government leaders in Whangārei on Friday: “If we are wanting to build a new highway, that’s years.”

Thought should be given to ways of gaining funds from high earners and companies less affected that can easily afford it, rather than those clearly needing recovery help and already struggling with the cost of living. Perhaps a ‘Kiwifuture’ fund could be set up for business and private contributions.

Opposition leader Christopher Luxon has said National thinks the Government should pay for cyclone damage by increasing debt, which has become a standard way of dealing with major crises. Reserve Bank governor Adrian Orr, in his battle with inflation, would prefer a levy and cuts in other areas to more borrowing.

Ultimately, while the Government will have a large say in how recovery money will be raised and spent, people in their own regions will need to ensure it makes a difference.