Socialist Appeal sends its support, sympathy and solidarity to the people of Christchurch after the February 22nd 6.3 aftershock devastated much of Christchurch and the surrounding area.
As Civil Defence in Christchurch now moves into a recovery phase. The question now being raised is how to re-build and ultimately how to pay for it. The cost of the recovery is estimated to be a conservative $15 billion.
Already, the Finance Minister has mooted that major cuts in public spending may be required. In the front line of the cuts are Working for Families Tax Credits, Interest Free Student Loans and Kiwisaver, as well as, using the earthquake as a justification for the government to privatise state assets to pay for it.
Such right-wing rhetoric bears no serious considerations. It is known that there is enough in the Earthquake Commission (EQC) coffers and private insurance cover to pay a substantial part of the cost of re-building the city. The government is expected costs are to be about $5 billion over a number of years. This is well within the parameters of government to fund through borrowing. It is noted that in the last budget the Finance Minister's personal tax cuts - for the benefit of the rich in the main - cost the state finances $14.3 billion in lost revenue over the next 4 years!
What the cost of the re-building after the earthquake expose is the limitations of the capitalist system. Already the PM is talking of doubling or tripling the EQC levy on insurance policies. This means two things ; more workers will not be insured for such disasters as they cannot afford the costs and big business gets out of paying the levy as it insures offshore. In addition to this building insurance premiums will increase regardless of this as the risk is now perceived by private insurance companies to be greater and terribly profitable too!
A progressive levy on income was suggested. This has been rejected by government. However well meant this is. One question remains – how to get big business to pay when they generally don't pay any such taxes? Without doubt the New Zealand economy will go deeper into recession because of this event and the economy will not improve much over the coming 12 – 18 months causing more misery as unemployment rises and living standards fall. All solutions based on capitalism ultimately put the burden on workers to pay.
The only sustainable solution is a socialist one. Labour needs to call for nationalisation of the banks and insurance companies under workers control and management, as well as, a programme of useful public works such as crash programme of house building etc. Not only would such policies re-build Christchurch but also re-build New Zealand - as the profits stolen by the big corporate are re-invested here through the socialisation of the economy by workers