Much of the inspirational rhetoric surrounding the Christchurch earthquake has had a genuine “We’re all in this together” quality. Certainly, most of the political benefits the quake has delivered to the government have sprung from that same unity of purpose, and shared sense of suffering. Yesterday, Finance Minister Bill English put all that at risk by flagging that all government spending is now on the table for re-consideration – including, for instance, shrinking the eligibility for Working for Families and interest free student loans.
It is not simply that the government’s mandate at the last election was based on promises not to touch such items. In exceptional circumstances – which the Christchurch quake certainly is – the basics of a mandate may need to be reviewed. However, it also makes it crucial that any such review be even handed, and undertaken only as a last resort. English completely failed that test. Every candidate for spending restraint and revenue relief that has surfaced in the past 48 hours (Working for Families criteria, interest free student loans, postponing or scrapping the CBD rail loop in Auckland, the partial privatisation of state energy companies etc) was on the government’s political wish list well before the earthquake. If it looks like English is trying to exploit the earthquake for party political purposes, that’s because it is exactly what he is doing. Barely a week after the quake – and while many people in Christchurch are still lacking basic services – the government has begun to play politics with their plight.
Government spending is, after all, only one half of the revenue equation. If English wants this to be a genuine process, all forms and all rates of revenue gathering should also be back on the table, including (a) the possibility of a special national tax levy for Christchurch and (b) a review of the government’s highly skewed tax cuts programme. The principle behind reviewing the criteria for Working for Families is supposedly that certain upper middle class families have little need for the WFF subsidy. Well, if means testing is to become the new norm, the same principle should be applied to the tax cuts programme – given that its benefits were showered disproportionately on the least needy income earners in New Zealand.
Treasury has been a worse than useless player in this crisis. No surprises there. In a demonstration of its usual preference for theory over reality, Treasury has reportedly opposed a special levy to help Christchurch recover and rebuild. The public, on the other hand, would support such a levy, as a meaningful expression of the “We’re all in this together” national sentiment. Why should WFF middle income earners, students and Aucklanders be selected out to shoulder the main burden of the quake, and of the government’s related borrowing programme? Last year, no such restraint was in evidence when nearly $2 billion was magically found to bail out the investors in Alan Hubbard’s business empire.
In sum, it is time that John Key and Bill English went public – and asked New Zealanders whether they would prefer to pay a special quake levy, or accept cuts in public services and partial privatization of state assets? As an aside, it is worth checking out this excellent NZ Herald summary of why government spending on the CBD loop is very much in the country’s medium term/long term interests :
[Auckland Transport committee chairman Mike] Lee said he was concerned that people might be using the Christchurch earthquake “to reinforce their own prejudices which we have seen on display for so many months” after the release of the business case and its compelling arguments for the rail link.
He was referring to the Government’s reaction to a report for for KiwiRail and the former Auckland Regional Transport Authority which predicted that the 3.5km underground link from the western end of Britomart to Mt Eden would pay for itself three and a half times over in benefits to Auckland.
A team of consultants warned that without the link, a dead-end Britomart would be almost at capacity within three years, leaving virtually no room for extra rail services after the arrival of electric trains in 2013-14.
Ultimately, Auckland would choke on its traffic congestion, and double or even triple bus lanes would have to be built on each side of main roads to have any hope of keeping people moving.
Living In Denial
Very soon, someone in government will need to do something bound to be deeply unpopular about the Rugby World Cup programme. Currently, Christchurch is due to host two RWC quarter finals and five pool games. Given that at least 85,000 foreign visitors are heading to this country for the RWC competition, that probably means that some 40,000 extra foreign tourists – not counting New Zealanders – may require suitable accommodation, and an efficient public transport system to and from the games in Christchurch.
Currently, it is hard to see how the Christchurch CBD (or city as a whole) will be back in adequate working order by September 10–11, sufficient to host the first two games on Christchurch’s roster. That’s assuming foreign visitors would want to take the risk of coming to Christchurch in the first place. Hotels that were booked to the gunwales are now either wrecked, or due for demolition. The current talk of putting tourists in cruise ships out in Lyttelton harbour is a sign of just how unrealistic the alternatives are.
On paper, Wellington and Dunedin are the only real alternatives for the quarterfinals, while Nelson or Invercargill could conceivably be candidates for the pool games. Problem is, Wellington already has two quarterfinals booked for the same days (October 8 and October 9) as the quarterfinals currently allocated to Christchurch. So Dunedin is the only real option.
Currently, Dunedin’s new and very expensive stadium has a grand total of just two pool games. I don’t know what Dunedin’s hotel bed capacity is, but on paper, it should be able to shoulder the burden of hosting two quarterfinals on the same weekend. Dunedin would also be the most accessible option for disappointed Canterbury fans, and would serve the greater tourism good of pulling those big spending foreign visitors south, and pumping them out towards Queenstown, Wanaka and points north, south and west of Dunedin.
So far, Key has merely expressed his preference that the RWC games currently set for Christchurch to be held there, since that would a symbol of the city’s potential for recovery. Indeed it would. It would be very nice. Reality though is soon going to require someone to step up and announce the shifting of the games.