23 Jun 2015

The burden of Christchurch quake repairs

7:08 am on 23 June 2015

Christchurch ratepayers are going to have to pick up more of the cost of repairing earthquake damaged pipes and roads.

The view down Worcester Street looking away from the Christchurch Cathedral.

The view down Worcester Street looking away from the Christchurch Cathedral. Photo: RNZ / Alexander Robertson

Christchurch City Council today starts debating a proposed infrastructure levy and rates rises.

An independent review has said the government's original contribution of $1.8 billion was sufficient, and it should not have to pay for the extra $400 million the Christchurch City Council said was needed to complete the repairs.

Mayor Lianne Dalziel said the previous council mistakenly signed a cost-sharing agreement with the government on the understanding all repairs would be covered by it.

"And the Crown understood that the funding arrangements provided for significantly less cover than the council had assumed.

"So I don't think there's anything further that we need to contemplate, other than how do we now address repairing the rest of the damage to our infrastructure."

The cost would be met by a 1.5 percent infrastructure levy on peoples' rates bills each year for nine years, starting from mid-2016.

The levy was in addition to a proposed average rates rise of 8 percent from the start of July, followed by increases of 5.5 percent and then another 5 percent.

The proposed infrastructure levy and rates rises are being debated by the council over three days from today and a final vote is due on Friday.

A crack in Woodham Road caused by the Christchurch Earthquake

Photo: 123RF

Christchurch Budget Service chairperson Don Johnson said the increases would be tough on young families.

"Because they've got the big mortgage, their insurance costs have gone up, and if they've got a mortgage, they have to have insurance, and the rates are increasing.

"Plus travel costs are going up because petrol's increasing in price again. So you've got increases across the board at the moment."

Mr Johnson said the quakes had left many living beyond their means, and he expected more to hit the wall financially once the rates increases began to bite.

"Some in recent times have got bigger mortgages because they've shifted out of a home into one of the new sub-divisions.

"They've had their earthquake payout and to get a newer home they've increased their mortgages. We've had a number of families that have had this difficulty."

Grey Power's vice president for Christchurch Brian Christian said for those on the pension, the increases would force some out of their homes.

"It'll be the last straw for quite a few who are on a fixed income. I just really can't see how they're going to manage. It's a major catastrophe in front of them."

Labour's Canterbury Earthquake Recovery spokesperson Ruth Dyson said the government had gone back on its promise to help rebuild the city.

"They have consistently said the government will stand beside the people of Christchurch.

"It seems they're very happy to take the additional funding they're getting from taxes as a result of the rebuild, but aren't prepared to come to the party in a fair way when it comes to fixing our infrastructure."

The earthquake Recovery Minister Gerry Brownlee declined to comment ahead of meeting with the mayor on the cost sharing agreement.

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