Labour wants clear guide on where quake appeal cash will be spent

Mark Weldon. Photo / Mark Mitchell

The Opposition is calling for the Government to be clear on how funds from its earthquake appeal will be used after the man appointed to run it, NZX boss Mark Weldon, indicated businesses may receive some of the money.

The Government Earthquake Appeal was established by Prime Minister John Key shortly after last month's quake.

Almost $16 million has been raised so far, including $8.2 million paid over yesterday by the Lotteries Commission from last Saturday's Lotto draws.

Mr Key this week announced the appeal would be led by Mr Weldon, who said the fund would pay for the restoration of Christchurch's "community infrastructure" such as school halls, cathedrals, gymnasiums, swimming pools and arts centres, and possibly also small businesses.

"Small businesses are important infrastructure. They do provide things that you absolutely take for granted and Christchurch is an SME [small and medium-sized enterprise] centre, so we need them to stick around."

How funds would be allocated to projects, including small businesses, would be determined by a yet-to-be-constituted trust, but "we could be talking about bridging finance and cash flow", said Mr Weldon.

Labour's earthquake recovery spokesman, Clayton Cosgrove, said support for Christchurch's small businesses following the quake was crucial, but it should not be done using charitable donations from the public.

"The first priority for charitable dollars is literally to help people with the necessities of life.

"Why should the charitable dollar go straight to contributing to commercial arrangements?"

"Though there is a legitimate need to fund small business in terms of cash flow ... I would have thought that was a role clearly for the Government."

Mr Cosgrove said it was now important the Government gave some clarity as to how appeal funds would be used.

"In order for people to have the confidence to give, they need a very clear message as to what the funds they're going to give are for."

A spokeswoman for Mr Key yesterday said funds would likely go "to support families in need as they go about rebuilding their lives, and is likely to support trauma and social services and the rebuilding of community infrastructure".

Appeal funds would potentially also be used for the reconstruction of iconic buildings.

Meanwhile, the Government ruled out the possibility that Lotto could repeat its donation to the fund.

Internal Affairs Minister Nathan Guy, who is chairman of the Lottery Grants Board, said the concentration of donations to the earthquake appeal meant other charities were struggling to raise money from their usual fundraising drives and the board was reluctant to starve them of other sources of cash.

PLEDGES

The Government Earthquake Appeal has raised $15.88 million so far including:

* $8.2 million from Lotto.

* $7.68 million in donations from individuals and organisations.

There have also been a number of large pledges made towards the appeal.

- additional reporting: Claire Trevett