Majority support Christchurch quake levy

Prime Minister John Key has ruled out a levy to pay for earthquake reconstruction, saying it would slow the economy down. Photo / Geoff Sloan

The Green Party's proposal for a temporary levy for rebuilding Christchurch has found considerable support from the public, according to a nationwide poll conducted by UMR.

However, the phone survey commissioned by the Greens also reveals support for a levy is weaker in Auckland, where almost as many of those who favoured the levy preferred big cuts to government spending programmes such as Working for Families.

Nationally, 40 per cent of respondents favoured the Greens' levy plan over increased Crown debt or big spending cuts. Twenty two per cent preferred the Government borrow more while 29 per cent favoured cuts.

Preference for the levy was strongest at 49 per cent in Christchurch itself and weakest in Auckland at 34 per cent - only a shade above the 33 per cent of respondents there who wanted to see cuts to government spending. The difference is well within the survey's margin of error.

Asked the slightly different question of whether they supported or opposed the levy, overall support ran at 57 per cent compared with 39 per cent opposed. Again, Aucklanders were almost evenly divided with 49 per cent supporting the levy and 47 per cent opposing it.

Greens co-leader Russel Norman said the results demonstrated "strong support" for the levy which would see New Zealanders pay an additional 1.5 per cent of their income above $48,000 a year, rising to 3 per cent on money earned above $70,000.

"New Zealanders have a great deal of compassion for Canterbury. They've been incredibly generous in giving to charities and they understand that we have an enormous bill to pay through central Government. They're prepared to shoulder a temporary tax even at a time when household budgets are tight."

That respondents favoured the levy over increased debt or spending cuts showed New Zealanders understood the economics of the matter "and support a fiscally responsible approach".

"Kiwis get that more debt is very bad for the country and deep spending cuts will be catastrophic.

"Spending cuts increase the chances of a new recession so you think from just a rational policy point of view that's a pretty silly thing to do. A big increase in debt risks a credit rating downgrade and that's a real problem.'

While Prime Minister John Key has said a steep increase in the Earthquake Commission levy homeowners pay with their insurance is likely, he has all but ruled out a levy to fund the rebuilding, saying it would slow the economy down. Instead he and his Finance Minister have indicated they will seek to curb government spending.

That, said Dr Norman, was the worst thing the Government could do.

"This is the 1991 lesson which National should have learned.

"New Zealanders clearly want to do the right thing and we know a temporary levy is smart economics, so the Government's refusal to consider it looks more and more foolish," he said.

"John Key has shown in the past he's willing to listen to New Zealand. Hopefully this poll, on top of the advice of several economic commentators, will shift his thinking."

The Greens estimate their levy - combined with returning the corporate tax rate to 30 per cent - would raise $1 billion a year and based on the likely bill for rebuilding the city, the levy would need to be in place for three to five years.

The poll late last month surveyed 750 over the age of 18, including 240 Aucklanders, and has a margin of error of plus or minus 3.6 per cent.

FOOTING THE BILL
How should the Government pay for the rebuilding of Christchurch?

* A temporary levy on taxpayers: 40 per cent

* Borrow more: 22 per cent

* Make big cuts to spending: 29 per cent

* Unsure: 9 per cent

Results from a recent UMR survey of 750 New Zealanders.