Hard News: What Now?
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Couple of questions:
1. What is the estimated hit on the Govt's accounts (not the total bill)? Including any rebuild cost for non-insured, direct cost of the response and estimated tax revenue hit from contraction in economy?
2. Is lowering the income point at which you still get WFF payment (from, say, payments when you're earning $70k a year with one child down to a threshold of $50k) really make a big dent in that? I realise WFF is a big percentage of welfare spend but what's the distribution like? -
Haven't seen a cost for the response. The estimate for rebuilding seems to be a $5b topup above EQC and insurance (though I'd say more). Key has talked today about the impact on GDP and tax revenue.
A recession in the first half of 2011 cannot be ruled out, and there’s likely to be “virtually no growth” recorded in New Zealand for the financial year through June, Key said. He estimated the impact of the earthquake will reduce gross domestic product by about NZ$15 billion ($11 billion) and result in about NZ$5 billion less in tax revenue.
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So if we're facing at least a $10b bill for this (wildly optimistically assuming full recovery in 2012) I wouldn't have thought changes to WFF abatement rates was a particularly useful answer.
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More opportune lobbying. Rebuild the cbd real fast says the head of the large Ballantynes department store - and make decisions in the next few weeks.
"Speed is going to be of the essence here. The longer the city is closed off, the more people will leave it, the more businesses will relocate, they'll set up in other areas, and they may like those areas and never come back to the city," Richard Ballantyne, executive director of Ballantynes department store, said.
"Key decisions have to be made relatively quickly, in order to make sure that the confidence can be kept up to a level where people will feel that they can come back and build their businesses in the inner city. What those businesses will look like nobody knows at the moment."
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It would be difficult for Ballantynes to go anywhere else, due to factors such as the size of its footprint, the fact it only worked very well in central city, and because it was synonymous with the inner city.
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While hopeful about the rebuilding of the inner city, Ballantyne acknowledged there had been concerns about the central district even before the first earthquake in September.
Issues had included the growth of shopping in the suburbs, commercial office space moving outside the four avenues central city precinct, and the near disappearance of the manufacturing sector.
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WFF cuts increasingly portrayed as a done deal.
Stuff site headline trumpets "High-income benefit cut after Christchurch earthquakes", though the story remains more tentative.
Herald story begins:
Wealthy parents receiving money from Working for Families look set to lose the funding as the Government looks to find financial relief for the Christchurch earthquake.
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Matthew Poole, in reply to
I don’t know how damaged the stadium is
Not very, from what I've seen/read, but surrounded by liquefaction. Which, given the projections of magnitude 4+ quakes at least monthly for at least another year suggests that the stadium cannot be guaranteed to be accessible come September without the kinds of horrendously expensive earthworks that might be justifiable under other circumstances but which, at present, would be an obscene waste of money that is better utilised elsewhere.
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On "funding by cutting costs", the DimPost's chart from the other day indicates that the family tax credit (aka WFF) costs $2.1b/year. If we very generously calculate that they rejig the rules so that there's a 25% reduction in the cost of the scheme, that's a bit over $500m in savings. When the bill the government is facing is $5b-plus, that's a pretty meagre effort.
On the other hand, nixing the Auckland rail tunnel, which the independent consultants who conducted the cost-benefit analysis concluded is vital to Auckland's economic growth (and thus increased contribution to the national tax take) won't save anything for a number of years because there's nothing to spend just yet. The cost of getting a route designated over the next few years is sufficiently low that the Council can afford to wear it. So it's entirely a political act to say the tunnel is off the table because money must be freed-up to pay for Christchurch's rebuilding, a rebuilding that will be largely complete before serious government expenditure would be required.
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Craig Ranapia, in reply to
Rebuild the cbd real fast says the head of the large Ballantynes department store – and make decisions in the next few weeks.
I know this is easy to say at the other end of the country, but wouldn’t rebuilding the CBD “real fast” cause more problems than it solved -- not least for businesses like Ballantynes that need structural repairs and services restored properly? I can understand where he’s coming from, and he’s not being totally unreasonable, but as Emma has said it’s basic infrastructure that’s really critical. That's a wee bit more complex than digging trenches, dropping in some wires and shit then covering it up.
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There are THREE cities in Christchurch right now, not one.
(via Kiwipolitico).
The stuff about Refugee City is very, very worrying. Read the whole thing, I just excerpt a part here.
RESCUE CITY is inside the four main avenues, and it is cordoned off. That means almost all our knowledge of it comes from media, and man is it a honey-pot for them!
It’s given us understandably-incessant tales and images of injury, tragedy, loss, broken iconic buildings, heroism, sacrifice, leadership and gratifying international response. It’s extremely television-friendly.
My quake experience started there, but actually almost nobody lives in Rescue City. The resources and attention which are seemingly being poured into it right now are NOT addressing the most urgent post-quake needs of the population of Christchurch.
SHOWER CITY is any part of Christchurch where you can take a hot shower, because you have electricity and running water and mostly-working sewer lines. By latest estimates, that’s about 65% of the city – much of it out west.
In that part of Christchurch, weary and stressed people are getting on with life – though some may be wondering if they still have a job. And a few of them with energy and time to spare are wondering if they can do more to help the rest of the city.
The media naturally lives in Shower City, and they talk almost exclusively to the business leaders and the Rescue City leadership who also inhabit it.
REFUGEE CITY is the rest of Christchurch – mainly the eastern suburbs, though there are pockets elsewhere. It includes perhaps 50,000 to 100,000 people, though a more-mobile chunk of them may have self-evacuated by now.
Only half of those who remain in Refugee City have power, and almost NONE have running water. Many have been living on their own resources, and their neighbours’, for over a week now.
That means that batteries have run down, gas (if they had any to start with) has run out, other supplies are low or gone. Roads are often very bad – and a lot of those from the poorer suburbs have no transport anyway.
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Matthew Poole, in reply to
digging trenches and dropping some wires and shit in the holes.
I thought we were talking about the CBD, not Refugee City :P
More seriously, Brownlee needs to stop prevaricating and announce if he's going to gut earthquake standards as he's already signalled is his wont. If he's going to do so, rebuilding the CBD "fast" is possible because any old hack could do the job. If, however, he decides (and I'm not hopeful on this) that the standards need to be better, that's going to delay all Christchurch reconstruction while the necessary actuarial work is completed. There's already talk of recalculating the appropriate classifications for various parts of the city.
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giovanni tiso, in reply to
The stuff about Refugee City is very, very worrying. Read the whole thing, I just excerpt a part here.
Emma posted this earlier - heartening to see that the Herald has republished it.
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Stephen Judd, in reply to
Can't believe I missed that. Oh well.
Judging by the 7pm bulletin I just heard, someone at RadioNZ is on the ball though. Lots of Eastern suburbs stories.
One thing that occurred to me: suppose you have no power and no wheels. Once your radio batteries have died, how exactly do you hear where to go and who to call? After a week there must be a lot of people who are isolated from official news and unable to report problems.
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Kumara Republic, in reply to
The stuff about Refugee City is very, very worrying. Read the whole thing, I just excerpt a part here.
And people got agitated by less worse outages than that on Queen St in 1984.
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Sacha, in reply to
If he's going to do so, rebuilding the CBD "fast" is possible
The more pressure to act in the short-term interests of those to whom this government prefers listening, the more likely standards will be 'relaxed'.
However it could go either way. Building and Housing Minister Maurice Williamson just told Mark Sainsbury he's proud of our standards for new buildings, but sidestepped questions about how to get more urgent action on retrofitting *older* ones. Christchurch's CBD looks likely to continue to have a mix of both - unless the standards are enforced more *strongly* to avoid that dangerous heritage so worrying to regional commandant Brownlee.
Williamson used the same language as his govt does about matters environmental - all about "balance" with economic objectives (which mainly centre around the convenience of the wealthy, obviously). If only smarter minds were around that cabinet table, we could have a bit of confidence about good decisions being made about this.
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Sacha, in reply to
Once your radio batteries have died, how exactly do you hear where to go and who to call? After a week there must be a lot of people who are isolated from official news and unable to report problems.
Hence my earlier suggestion:
Reading that Peter Hyde piece, it sounds like an urgent investment in door-to-door circulation of clear printed material is warranted - and asking at the same time what each household needs. Then repeating the process regularly.
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how exactly do you hear where to go and who to call?
Personally, I'd be going with word of mouth, walking to wherever people are to get news. It's not the same as having radio, TV, and the 'net, but it does work. I'd be trying to hook up with neighbors for whatever I could get, lifts to the shops, phone recharging, news, etc. And for whatever I could do for them, too. I'd hate to find the oldies in my street had just keeled over because no one checked.
But I'd be getting angry about a lack of large scale support, too.
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Ben Wilson- there are well-established gangs round those areas & it sounds like they are already predating...
they sure as shit arnt there helping taua acoss the street- fuckwits -
Here's a cracker. The Standard digs out Bill English explaining National's decision in 2008 not to roll back WFF if elected.
“The National Party’s decision not to change Working For Families delivers certainty for struggling families.
A careful analysis of Working For Families reveals there would have only been small savings had National opted to remove those on higher incomes from the scheme. Taking higher-income families out of WFF saves very little money, at least in the short term.
As at 31 March 2007, around 1,000 families earning over $100,000 were receiving WFF, and payments to those families totalled only $1.1 million. Any policy to take higher-income families out of WFF would only affect a handful of families, and they would be families with four or more children.
So cutting the top of WFF would save a tiny fraction of what's needed to pay for Christchurch. However the scheme is apparently constructed so that cutting the top inevitably hacks into the middle as well. Idiot/Savant considers the impact:
Basically, there's no way to do this which doesn't hurt people who National doesn't want to hurt, either by cutting their income or sticking them in a poverty trap. It can't be done. If National wants to cut the top-end of WFF, then everyone else gets to be collateral damage to their symbolism. That's not good policy.
And in an election year, its not good politics either. There will be no shortage of people in Christchurch willing to ask "how does cutting my income / massively increasing my marginal tax rate help me recover from the earthquake". Its a damn good question.
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Thomas Johnson, in reply to
However the scheme is apparently constructed so that cutting the top inevitably hacks into the middle as well.
Apparently Clark and Cullen did a good job then when they introduced the changes to make the scheme more generous just before the 2005 election. They set it up in a way that made it difficult to change. Not impossible, just difficult.
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Kudos to The Herald for reprinting the refugee city article this morning.
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Surely all it will take is for a major daily to publish an interview with a homeless Christchurch family that is in danger of losing WFF and the whole idea will be dropped?
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Craig Ranapia, in reply to
Kudos to The Herald for reprinting the refugee city article this morning.
And with proper credit, when The Herald has a rather patchy record on when it comes to lifting reporting and quotes from blogs.
But, the NZ Herald being what it is, you’ve barely extended credit when some idiot sub throws up a tone-deaf headline like “Battle of Port-a-loos in dusty suburbs” FFS, when I’ve been hearing people on Morning Report bending over backwards to avoid that kind of framing it’s distasteful.
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Craig Ranapia, in reply to
Surely all it will take is for a major daily to publish an interview with a homeless Christchurch family that is in danger of losing WFF and the whole idea will be dropped?
Oh, but isn't politicizing human misery really really bad? I do struggle to keep up with where the moral high ground is at any given moment.
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Andre Alessi, in reply to
Oh, but isn’t politicizing human misery really really bad? I do struggle to keep up with where the moral high ground is at any given moment.
Well, when it's a policy decision someone agrees with, it's "politicizing human misery", when it's not, it's "putting a human face to the fallout of heartless government policies".
[omarlittlemode] All in the game, yo. All in the game.
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Labour MP Grant Robertson blogs about politics and the quake (and attracts inflamed comments already - sigh).
The mere fact of this debate has caused anguish for some. I accept that this is a sensitive area. As I said there are many people still waiting to learn the fate of their family members, and thousands of people doing it really tough every day. But the discussion about the future of Christchurch and what will be done is now in the public arena as likely costs are released by the government, and questions asked by the media and others. It does not, and should not stop the focus on rescue, recovery and ensuring the immediate health and safety of residents.
In fact it is important for our democracy that the debate is held. These are important decisions about the future of our whole country, especially Christchurch, but for all of us in the end. The choices that are made, and the priorities accorded to future spending need to be the subject of debate. There is need to hold the government to account, and to oppose and propose where necessary. This is not disrespectful to the people of Christchurch, it is in fact to support them and take further steps to recovery.
We must strive to work together for the people of Christchurch. We must be sensitive to an emotionally charged situation. But there will be debate and disagreement. That is a healthy part of our democracy. That is part of politics. And politics need not be a dirty word. It should be the mechanism by which we go about about finding the best outcome for the people and the future of Christchurch and the rest of our great country.
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