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Budget Policy Statement 2017

Rebuilding Christchurch and responding to the Kaikōura earthquakes

The Government will do all that is required to support the recovery from the recent Kaikōura earthquakes.

It is too early to know the full extent of damage, and the likely fiscal cost remains very uncertain. The most significant impacts are likely to be increased infrastructure spending to repair roads and other utilities.

The Treasury's preliminary estimates are that the fiscal costs of the earthquakes could be around $2 to $3 billion. However, some of this is expected to be funded by insurance proceeds, existing resources or other funds. As a result the HYEFU forecasts include a net operating cost of $1 billion to the Crown in 2016/17, in addition to future new spending allowances.

The funding required to respond to the Kaikōura earthquakes will be reassessed in Budget 2017 as more information comes to light.

Budget 2016 committed the last major tranche of funding to support the rebuilding of Christchurch after the destructive earthquakes in 2010 and 2011. Going forward, the Government is focused on supporting the move from recovery to regeneration.

The Government's total contribution to the Christchurch rebuild is significant, at around $17.5 billion, including payments made by the Earthquake Commission (EQC), net of reinsurance proceeds.

Hon Bill English
Minister of Finance

8 December 2016

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