How to pay the bill for Christchurch
February 26, 2011
Various articles are starting to appear concerning how the bill for the quake might be paid and EQC coffers replenished. See Fran o’Sullivan and Brian Gaynor
Some starters, in Adam’s view:-
- Working for Families – restrict to those on lower incomes
- Eliminate interest free student loans where family income is over $80,000
- Require all householders to have EQC cover, thus stopping the nonsense where some have no EQC cover as they fail to insure their property – similarly all houseowners and property owners generally to pay fire service levy
- Reduce/eliminate Kiwisaver subsidy
- Give 20 year tax holiday to new manufacturing or other enterprises in NZ, ie totally new investors, who set up shop in Canterbury and invest a minimum $50 million in Year 1 and $15 million a year in each of the next 5 years. All tax foregone to be payable should they pull out from NZ within 20 years, and 50% after 20 years and within 30 years. All such business to be subject ot review of transfer pricing etc to ensure no artificial restriction of profit.
- review all planned infrastructure spend, eg Puhoi highway and consider whether funds better spent in Christchurch
- cut 5% from all government spending
- as a gesture cut all MP salaries and allowances by 5%
- no pay increases for all public servants who earn over $150,000 for one year
- same for SOEs
- commitment from CEOs of 50 largest companies to the same
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2 Comments
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I think I’d start from first principles..
Core Govt Expenditure in 2000 was $34 billion, today its $70 billion. Take out 30% inflation and you have a real increase of $26 billion. Make some allowance for *real* value in that increase and you’ll still come to the realisation that our Govt is spending somewhere between $10-20 billion pa too much.
As the saying goes.. “Things that can’t go on.. wont”, and we have surely reached that stage now.
When the Sept quake struck the first calculation was the cost would be $2 billion.. now its $5 billion.. so we can assume that this current first estimate of the costs of restoring Chch at $10 billion could treble. Canty is worth about 15% of our population and economy.. thats munted for some time to come and we need to understand that an extra 30-50,000 jobs are gone or at risk.
These figures, plus the extra effort needed to replenish the EQC fund and pay much higher insurance for houses and businesses surely mean we can’t make do with penny pinching.. we have to take some pretty dramatic action to remove costs from Govt.
JC
Damn right! And frankly the half-measures above simply won’t get anywhere near $20-30 BILLION per annum that we need to save.
civil servant pay freeze? Don’t make me laugh. How about a 50% pay cut?
WFF/Kiwisstealer/FreeMoneyForBludgersAtUni/CullenFund: stop the lot.
OK even so, that’s probably no more than $5 Billion per annum. We need another $15.
As a guide that’s:
* ALL health spending
* ALL education spending
* Half benefit spending.
Ok pick one. Then next year, when we need another $15Bn or so, pick another. For me, I’d make all the hard decisions now – we all know what is needed:
* just stop paying benefits. Dole DBP WFF super. just stop.
* schools all convert to private companies, assets vested in their boards
* ditto hospitals.
There. It’s done. Brownlee has the legal power to do this by the weekend.