Community Scoop

Christchurch Earthquake bulletin edition 148

Press Release – New Zealand Labour Party

A local hotel owner in Kaiapoi is just one of countless local businesses unable to get on with the rebuild due to the insurance gridlock. In this instance, the owner is unable to continue building work which was due to be completed before Christmas …
22 November 2011 MEDIA STATEMENT
Christchurch Earthquake bulletin edition 148
A regular bulletin started by the Labour Party’s Christchurch electorate MPs, Clayton Cosgrove (Waimakariri), Ruth Dyson (Port Hills), Lianne Dalziel (Christchurch East) and Brendon Burns (Christchurch Central) to keep people in their electorates and media informed about what is happening at grass roots level.
Labour will:
• Purchase 1500 properties and sell them at cost to red zoned residents
• Ring-fence $100 million as compensation for home improvements
• Release all available geotechnical information
• Resolve the insurance gridlock
• Intervene in the insurance market as a last resort
• Make community engagement a priority
• Use youth unemployment to fill the skills gap
• Establish an independent insurance commissioner
For full policy details go to:
• Ensuring widespread EQC coverage – making it universal by collecting levies through the local authority rates system.
• Increasing the cap on EQC Cover from $100,000 in consultation with the EQC and the insurance sector.
• Making the levy proportionate by basing it on rateable values.
• Reviewing the Operations of Earthquake Commission to ensure the lessons of the Canterbury earthquake are used to secure the long-term reliability of the Commission
• Covering temporary accommodation expenses.
For full policy details go to:

CLAYTON COSGROVE: A local hotel owner in Kaiapoi is just one of countless local businesses unable to get on with the rebuild due to the insurance gridlock. In this instance, the owner is unable to continue building work which was due to be completed before Christmas because he is unable to get insurance cover on a $200,000 to $300,000 bank loan. This is despite the fact that he has put $900,000 of his own funds into rebuilding the hotel and that the hotel is being built to the highest building code standards. When such projects have to be put on hold indefinitely it really has got to crisis point. But, it’s not just the hotel owner who is being affected by the insurance gridlock. The local builder also had work up until Christmas. That’s now been put on hold and staff at the hotel won’t get work until it re-opens. As the hotel owner said “these insurance companies are holding everyone to ransom.” The Government can no longer do nothing, it can’t allow this sort of thing to continue. The gridlock is costing jobs; it’s slowing down growth and it is hurting local businesses that simply want to get on with the rebuild. It really is time for the Government to take some serious action.

BRENDON BURNS: There was enormous, if temporary, relief in my electorate office yesterday to learn that an extension has been granted to temporary extra staff assisting Christchurch electorate MPs through the enormous extra workload created by the earthquakes. Since February, I have been blessed to have had the services of James, who has worked tirelessly assisting hundreds of my constituents with EQC, insurance, housing and other issues. He has taken a lot of stress off people who have been at the end of their tether, by taking up their issues and usually getting some improvement. There had been signals that the funding for James and his colleagues in other electorate offices would end on Friday. That would have been untenable. We now have an extension until February. Other electorate work has not stopped since the quakes. We have continued to assist hundreds of people this year with ACC, health, immigration, business, council, red-tape and other issues. As I write, Kate who assists me on those matters is with a couple – the man terminally ill -who need help with relocation costs. I can only hope that somehow there will be further recognition in February that electorate offices are lifelines to people in need and the residue of the devastation we have endured will take a long time to clear.

LIANNE DALZIEL: I was pleased to see CERA release a video designed to explain what is happening over the new technical categories for foundation design. But I am more than a little surprised that Roger Sutton, the chief executive of CERA, is the interviewer as opposed to a participant in a panel discussion. In a disaster recovery situation, leadership is vital. Asking patsy questions is not one of the traits of leadership, which suggests that this is another ‘brainwave’ of a government determined to answer only the questions they want asked, and I have a couple of concerns that go to the heart of my fears about the red zone offer. The first is when Roger Sutton asks the EQC representative whether there will still be a small number of people whose houses have turned green who are not going to be able to rebuild and the land is going to be written off. The EQC replies: “yeah, we are not expecting too many of these Roger, we would settle them once the engineers have confirmed they are beyond economic repair. We would work to what we call the minimum lot size or size site which is basically- under the district plan over that property – what is the smallest sub dividable section and then achieve the registered valuation on that. Now that is a market valuation on September 4, and it will feature the unique features of the property. We do recent sales analysis so it really does reflect the market valuation [and] we do a simple test against comparing that against repair costs and if a repair is uneconomical we pay the person the minimum lot size. They would then retain ownership of the original parcel.” Roger Sutton then asks how the insurer would treat that situation and he says: “Well in those circumstances Roger, if you can’t rebuild on the site that you had simply because the land can’t be remediated then we would treat that property as a total loss and the customer would have the option to either rebuild on another site or if it was a cash settlement take a market value settlement.” So why does this not apply in the red zone? Why is the government letting the insurance industry off the hook? And why is no-one asking the government the hard questions?

RUTH DYSON: There have been more meetings with residents expressing frustration and anger at the huge gap in communication from CERA and the Council. However you have to feel sympathy for the staff fronting these meetings, because it clearly wasn’t their call to not have any decent face- to-face communication until now, yet they still have to bear the brunt of the frustration. They are taking it without passing the buck and with understanding and empathy. The message we have been giving the government of ‘tell people what you know when you know it and then come back and tell them more when you know more’ is highlighted when you see people struggling to understand some of the terms which just roll off the tongues of the officials but are like a foreign language to the rest of us. Morgans Valley residents who are out of their homes left with some indicative timeframes, but with many unanswered questions about really critical issues as well. One of those is around the terms of the potential “buyout” people will be offered should they not be allowed to move home again or rebuild on their section. Will it be a redzone-type offer or will it be what the blue/green TC3 people who have a very bad Geotech report end up with? Or will it be some other package under a City Council retreat zone offer? This was not made clear. The money is different between a red zone offer, an individual EQC/insurance offer and (potentially) a retreat area determined by the Council. There is further frustration in Lyttleton regarding the lack of communication – about landslide, roads, retaining walls and zoning. It is something that could be so easily imrpoved so much by information and communication.


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