Friday, February 25, 2011

An earthquake levy

Now that the extent of the damage caused by the Christchurch earthquake is becoming clear, people are beginning to wonder how to pay for it. On the one hand, this is exactly what we have EQC for: saving for that rainy day when the big one hits. On the other, after two major earthquakes in Christchurch, EQC is looking pretty cleaned out, so there will be problems if we have another serious natural disaster in the next decade or so. In Australia, the government imposed a disaster levy - a temporary rise in income tax, with the revenue tagged to disaster relief - in response to the Queensland floods. Now the Greens are proposing a similar measure here.

Its a good idea. We need to raise the money somehow, and doing it through income tax is the fairest and most effective method. The Greens' proposal would raise between $460 and $920 million a year, depending on the rate at which it is imposed - which is enough to make a serious difference. And while it means that people in Auckland and Wellington will be helping to pay for Christchurch's earthquake, that's what living together in the same country means: sharing the burden and bailing each other out.

John Key is reportedly lukewarm on the idea, so I guess we'll get to see who he puts first: the people of Christchurch, or his rich mates. Time to choose, John...