PM warns EQC levy may double or treble

2:58 am on 28 February 2011

Prime Minister John Key says the Earthquake Commission levy paid by all home owners could be doubled or even tripled because of the Christchurch earthquake.

Mr Key says the Government is still considering a levy on all New Zealanders to pay for the rebuilding of Christchurch, but its preference is not to have a special one-off levy.

However, he says the EQC fund of $6.4 billion is likely to be decimated by the cost of rebuilding Christchurch and will need to be replenished.

The Prime Minister says the annual levy currently works out to about $60 per year for the average household, and it will increase to about $120-180 fairly quickly.

The Cabinet should get an early estimate of the cost of the earthquake when it meets on Monday. It will also discuss a financial assistance package to help meet that cost, and Mr Key will unveil the details after the meeting.

Green for go

The Green Party co-leader, Russel Norman, says it makes sense to increase the Earthquake Commission levy paid by homeowners in case there is another serious event.

Dr Norman says the Government could borrow to replenish the fund, but it has options available to it.

"In our current situation the international capital markets are open to us, so if there was another event in the near future before we built up our own reserves, based on how things currently stand we shouldn't have much trouble accessing significant international funds if we needed them."