The announcement of a public inquiry into the Earthquake Commission (EQC) headed by Dame Sylvia Cartwright is welcome, but it is unlikely to bring any new information to light, National’s EQC spokesperson Stuart Smith says.
“It has always been our view that an inquiry of this nature is unlikely to reveal any new information that hasn’t already been revealed through the Auditor-General looking into how claims have been handled, the Ombudsman investigation into client rights and privacy or by the Chief Executive and Chair of EQC’s numerous appearances in front of Select Committee.
“The most important thing is that lessons are learned from how we responded to New Zealand’s largest seismic event. We are confident these lessons have been learned.
“We know EQC was not equipped to deal with an event the size of the Canterbury earthquakes. So changes to the client handling model were made and when the Kaikoura earthquake occurred a Memorandum of Understanding between EQC and private insurers was signed to ensure claims were resolved efficiently and in a timely manner.
“This was a different approach than the one used in Canterbury, but has shown to be incredibly efficient and effective. With the claim settlement process progressing much faster after the Kaikoura earthquake, we can see how important these changes were, and we know if another similar event was to occur, EQC is in a better position than it was.
“While New Zealand’s expertise in reducing disaster risks is internationally recognised, it is still important to look back and make sure should an event like the Canterbury or Kaikoura earthquakes happen again we are in the best position to recover afterwards.”
Today’s announcement the Government will pay uninsured former Residential Red Zone owners 100 per cent of their 2007/08 rateable value could create considerable risk for the Crown, National’s spokesperson for EQC Stuart Smith says.
“At the moment New Zealand has substantial cover for disaster insurance, with most building owners paying for disaster cover meaning should there be another event like the Canterbury Earthquakes, we are in a good position to respond and if necessary rebuild.
“For example at the time of the Canterbury Earthquakes, 99 per cent of Red Zone home owners were insured against a disaster, having taken out individual insurance policies.
“However today’s announcement that the Crown will pick up the entire cost for those who hadn’t taken out their own insurance could set a concerning precedent.
“This is fundamentally unfair to those property owners who did pay for their disaster insurance.
“Should people take this as a signal they don’t need disaster insurance, the Crown could end up taking on considerable fiscal risk in the future.
“The previous National government announced the uninsured properties in the Residential Red Zone would be paid 80 per cent of their pre-earthquake (2007/08) rateable value.
“We considered a range of factors, including fairness, financial responsibility, protecting the value of insurance and the homeowner’s wellbeing.
“Each of those homeowners had already been paid 100 per cent of the pre-earthquake value of their land.
“There is now a risk property owners will choose not to pay for disaster insurance and instead wait for the Crown to bail them out.”
The Canterbury Earthquakes Insurance Tribunal Bill is underwhelming and doesn’t provide any substantive relief for people with outstanding EQC claims, National’s EQC spokesperson Stuart Smith says.
“Justice Minister Andrew Little confirmed in Parliament’s Question Time today that the bill fails to offer anything different to what is already available to people with outstanding EQC claims.
“The Canterbury Earthquakes Insurance Tribunal can only decide on simple cases which are not already before the courts, ruling out a vast majority of EQC claims.
“Surprisingly, the Tribunal also has the power to transfer cases to the court if they are too complicated or entirely new to the system. This means the Tribunal has limited powers to make its own decisions and can easily palm cases back to the District Court or High Court.
“The reality is we have 3,600 claims which are still outstanding from the Christchurch Earthquakes, and the vast majority of these are incredibly complex.
“How is a Tribunal supposed to solve these if they are required to transfer complex claims to the courts? This is not ‘speedy, flexible and cost-effective’ as the Government claims.
“What the Government has presented to us is essentially a double up of the existing court structure. Experts and lawyers will be stuck between the Courts and the Tribunal which will only slow things down even more.
“One issue which has dominated headlines is on-sold homes, yet the Government has specifically excluded anyone bringing a claim relating to one of these properties. These people deserve answers, and again we see big promises from the Government, but they have failed to come up with the goods.
“This Tribunal will not be up and running for another year, meaning it has taken this Government over 18 months to get anything started. It’s time they stopped playing games and rolled up their sleeves.”
A Bill to update outdated legislation that governs friendly societies and credit unions passed its third reading today unanimously, Kaikōura MP Stuart Smith says.
“I am proud to see the passing of this legislation which will see friendly societies and credit unions fall into line with modern practises adopted by other financial institutions,” Mr Smith says.
“Some of the most important changes include allowing credit unions to become bodies corporate, allowing them to lend and provide services to other small and medium enterprises, and streamlining the position of associations of credit unions.
“Considerable thought has gone into ensuring this Bill both modernises the existing legislation and ensures credit unions are able to conduct business more effectively and efficiently. These changes will make life much easier for friendly societies and credit unions.
“By streamlining the previously complex regulations, Parliament is handing a vote of confidence to our financial institutions to give them the best chance of success. Credit unions will still be subject to the legal and regulatory requirements under various forms of financial legislation.
“This Bill has been a collaborative effort right across the industry, and also across Parliament. I would like to thank everyone who has been involved throughout the process.”
The Government’s backward and ill-thought through changes to overseas investment regulations are having a perverse effect and driving more land into the hands of overseas investors, National’s Spokesperson for Viticulture Stuart Smith says.
“Forestry is getting an easy pass under the Overseas Investment Act which allows for significant foreign investment in land.
“Meanwhile, other primary industries like viticulture are suffering because the profit à prendre scheme – which allows for the extraction of value from Kiwi-owned land while ensuring it remains in the hands of New Zealanders - is being tightened up.
“Viticulture is an industry which aims to keep land ownership within New Zealand by using profits a prendre. This means Kiwis own the land while overseas companies use it to grow grapes to make wine. This ensures more economic benefit remains in New Zealand while still encouraging overseas investment which creates jobs and boosts incomes.
“But the Government’s changes will make it harder for foreign investors to make a profit by working with New Zealand landowners. This will only mean more of them will look to buy the land they are using, taking jobs and investment with them.
“Additionally, Minister of Land Information Eugenie Sage has confirmed in select committee this week that we need more land to be freed up in order to meet the Government’s promise to plant a billion trees. She has ruled out using steep land for forestry, meaning productive farmland will be used for trees instead of grapes or cows.
“Other industries, including viticulture, are paying the price because of Shane Jones’ pet project. This is a kick in the guts for the regions.
“The changes from the Government will only drive more land sales into the hands of overseas investors – the very thing the Government claims it is trying to stop. It is typical of this Government to say one thing and do the opposite.
“It needs to start giving more thought to the policies which affect New Zealanders not making things up on the hoof. All industries must be subject to the same overseas investment regulations so that no one is at a disadvantage.”
The report by the Independent Ministerial Advisor for the Earthquake Commission (EQC) released today is a step in the right direction, but requires the Government to take immediate action, National’s EQC Spokesperson Stuart Smith says.
“The people of Christchurch have had their voices heard and now it’s time for the Government to act quickly on the recommendations to ensure remaining claims are settled.
“There are still around 2,600 claims outstanding from the Christchurch earthquakes and people deserve concrete answers rather than mere suggestions.
“This is a complex issue due to the unprecedented nature of the events in Christchurch, but it is important that settlements are made quickly and fairly. This is a time for cool heads.
“The report makes a number of recommendations, however there is a lack of clarity about the issue of on-sold homes.
“This issue is one that has dominated headlines and is particularly concerning. The report fails to hold anyone accountable for the cost and homeowners are still being left in the dark.
“It is up to the Minister to clarify the Government’s position on on-sold homes and explain who will be picking up the bill. Making a recommendation only leaves the people affected out of pocket while they are forced to live in homes that have suffered subsequent damage.
“The Minister has communicated to the interim chair of EQC, Dame Annette King, that the recommendations need to be implemented right away, however she has failed to provide a timeframe.
“The Government must not leave this issue to fester any longer. The Minister needs to give us more information about when she expects the changes to be made. There is no point having another inquiry into an inquiry.”
Education Minister Chris Hipkins has taken the Marlborough Colleges co-location project back to square one and is now stalling on progress, Kaikōura MP Stuart Smith says.
“Documents released under the Official Information Act (OIA) show that since February, Mr Hipkins has had the opportunity to proceed with the co-location but instead has turned it down in order to begin an entirely new business case process, for which we have not been given a timeframe.”
The documents include a report prepared by the Ministry of Education for Mr Hipkins dated 20 February 2018, recommended two actions: to seek Cabinet approval for additional spending to continue the co-location; or to update the business case options, including any other feasible options and confirm whether co-location is still the preferred option.
“The Marlborough community already voted for its preferred option – co-location - back in 2013. Mr Hipkins’ decision is a significant backwards step and one that is hugely disappointing for Marlborough, particularly as the original $63 million budget to build our colleges, with a completion date of 2021, had already been agreed on by Cabinet.”
Mr Smith says the report states additional funding would have come from existing ministry baseline funding, with financial approval incorporated in Budget 2018.
“Given the Budget was announced last week, Mr Hipkins has now foregone this opportunity and it is unlikely he will seek further funding approval from Cabinet for our colleges any time soon.
“This is little more than a stalling tactic on a very important project for our region. I will continue to put a great deal of pressure behind this issue.”
The co-location of Marlborough Boys’ College and Marlborough Girls’ College is under threat with the Ministry of Education confirming the project is under review, say National’s Associate Education Spokesperson Simeon Brown and Kaikoura MP Stuart Smith.
“In 2015 the previous Government announced plans to co-locate Marlborough Boys’ College and Girls College’ onto one site. The $63 million project is now in serious doubt as the new Government has put it under review despite overwhelming public support,” Mr Brown says.
“The two schools and the community have worked hard with the Ministry of Education on the design of the campus, which was expected to be built through a Public-Private Partnership. We know that PPPs can provide cost savings and deliver more innovative facilities.
“The Ministry has been in discussions to secure land for the campus since 2015. However, with the failure to secure a site and uncertainty created by the Government around the future of PPPs, the community is understandably worried about the co-location project.”
Mr Smith says news that the project is now under review will only fuel these concerns.
“The co-location is a great opportunity for Blenheim to build on our already excellent educational facilities by providing a more modern, innovative and state-of-the-art campus for the young people in our community,” he says.
“It is very disappointing to learn that the project has been put under review, especially given several years of community consultation and overwhelming public support.
“Staff, students and parents have poured their hearts into developing plans for the co-location of their schools and it would be a real shame for all their hard work to go to waste.
“The Government has allowed the Whangārei Boys’ High School redevelopment to go ahead as a PPP as originally planned – Marlborough Boys’ and Girls’ Colleges deserve the same treatment.
“This is about ensuring our young people get the best opportunities to be successful. The Government needs to put aside its contempt for PPPs and allow this project to go ahead.
“I will be hosting a public meeting with Nikki Kaye and Simeon Brown on May 6 at 4.30pm, venue to be confirmed. We want to hear from the community their thoughts on the review and the best way forward.”
National is welcoming the announcement of reforms to the EQC Act but is calling on the release of information around one that could be prohibitively expensive National’s EQC spokesperson Stuart Smith says.
“EQC cover is unique to anywhere else in the world and works very well.
“The reforms announced by Megan Woods today are largely a result of the review of the Act announced by the National Government last year.
“I am pleased that the Government has picked up most of the recommendations particularly raising the cap from $100,000 to $150, 000.
“However, extending the claim period from three months to two years will prove incredibly expensive and problematic.
“In a big event, it will confuse arguments of apportionment between reinsurers so the Minister needs to answer how different events are defined within that two year period.
“Following the February 2011 earthquake in Christchurch for example, there were literally thousands of aftershocks, many of which were considered separate events.
“This announcement will likely cause significant increases in costs to policyholders - I’d like to know from the Minister what advice she has had from Treasury about how much this will be - and whether Treasury supports the extension of the claims period.
“I am calling on the Minister to release Treasury’s advice on this matter,” Mr Smith says.
A Members Bill to introduce a legal timeline for insurance companies to assess and present a settlement offer to claimants has been lodged by Kaikoura MP Stuart Smith.
“We’ve just received the recommendations from the review into improving the emergency response to large-scale natural disasters, but we also need to look at how we can make life a little easier for people who are dealing with longer term effects like the loss of their home,” Mr Smith says.
“I’ve heard from too many people affected by the Kaikoura and Christchurch earthquakes that dealing with insurance was more stressful than the earthquake itself. That’s why I’ve lodged the Insurance (Prompt Settlement of Claims for Uninhabitable Residential Property) Bill to provide a timeline for when insurance companies must act by.
“My Bill will require an insurer to make a decision about a claim and notify claimants within six months of receiving the claim. This will speed up the process and give claimants greater clarity about when they can expect a resolution, which will help ease the stress during difficult times.
“While people are required to have their insurance premiums up to date, there is currently no time requirement for insurers to assess claims and make an offer. There must be a clearer understanding of obligations both for the insured and the insurer as to the time it will take for an offer to be made.
“In extreme circumstances, the Minister will have discretion to grant an extension to the six month deadline.
“In a country prone to natural disasters, it’s important after events like the Kaikoura and Christchurch earthquakes that we work to identify lessons and make changes to better our response for future events.
“Putting into law a deadline for insurance companies to make an offer to claimants will be a positive step forward. I look forward to this Bill being drawn from the ballot.”