Prime Minister John Key says the Government can cover the costs of damage from the latest earthquakes but it could mean increasing debt.

Key said on Breakfast it will be some time before the cost of the earthquakes is known but he has already estimated it will be in the billions of dollars.

He said EQC had resources and re-insurance, as well as effectively a Government guarantee "and we have the resources".

"Our debt levels are immensely low. They are under 25 per cent of GDP. I remember when I first became Prime Minister they were talking to me by 2020 the expectation it would be 60 per cent of GDP and our GDP is over a quarter of a trillion dollars.


"So there are no issues in terms of us paying. We wouldn't necessarily want to pay the money - we've got other things than fixing up earthquake damage, but you do what you've got to do. "We can meet that bill."

The Government recorded a $1.8 billion surplus for the past financial year and National has been talking about offering tax cuts next year. Finance Minister Bill English has also set a new target of reducing debt to 20 per cent of GDP.

The Christchurch earthquake cost $45 billion, but Key said that was in a large city and involved a lot of houses and buildings.

It was too early to assess the cost of repairs in Wellington and to road and rail in the South Island, but he said it cost $40 million to clean up a slip in the Manawatu Gorge - and he had seen half a dozen such slips along the Kaikoura coast.

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John Key assesses the damage caused by the earthquake

It was also likely Kaikoura businesses will get financial support from the Government to help recover from the quakes,

Finance Minister Bill English reiterated Key's estimate that the cost of quake repairs would be in the "billions".

He said the Earthquake Commission disaster fund was depleted, but a Government guarantee would mean all insurance claims were met.

English said not only were South Island roads badly damaged, but also the ports at Picton and Wellington.