Note 35: Subsequent Events
Deposit Guarantee Scheme
Since 30 June 2010 three financial institutions have gone into receivership. The largest of these was South Canterbury Finance. Details of these receiverships are included in note 30 of these financial statements.
Canterbury Earthquake
On the 4th of September 2010 the Canterbury region experienced a serious earthquake. The Crown is likely to incur significant direct costs as a result. These costs will include:
- Claims settled by the Earthquake Commission. The cost to the Commission is expected to be between $1 and $2 billion,
- Repairs to government owned assets,
- The provision of social assistance, either through new or existing programmes, and
- Contributions towards the replacement of local government infrastructure assets.
In addition to these direct costs, there is expected to be both negative and positive impacts to the economy (and consequently tax revenue).
The financial effect to the Crown of this event cannot be reliably measured at this stage. Some costs will be covered by existing insurance arrangements. While the effect cannot be measured it is expected to increase the operating deficit and net debt in future years.
