Editorial: Quake buy-up huge lift for weary victims

File photo / Mark Mitchell

The people of Christchurch have been in desperate need of something to boost their morale. Their character has been tested to the full by the earthquakes that have pummelled their city since September.

The devastation wrought by these tremors has also been a test for the country's resolve. How firm would its commitment be to those worst affected by the earthquakes? Yesterday, the Government supplied a substantial part of the answer. In the process, it surely delivered a shot of confidence to Cantabrians.

The Government's announcement divided Christchurch into four zones. In the worst-affected red zone - mainly land east of the city centre along the Avon and related waterways where liquefaction has been widespread - the owners of 5000 houses have been told they can choose to sell either their whole property or just the land to the Government, whichever works best for them.

The offer of purchase will be at the current rating value. If that is generous in itself, a quirk of the rating cycle means the value dates back to 2007, near the peak of the property boom. This is surely an offer too good to refuse.

Indeed, the Government has provided plenty of reasons for red-zone homeowners to accept its offer to buy their entire property and shift to greener pastures.

It says that it will not be feasible to rebuild on this land for three to five years, and that there is a high risk of more damage from further aftershocks. For good measure, those who do not sell will not have services such as sewerage and reticulated water.

Their properties will have little value for the foreseeable future. All but the obdurate will surely cash up and move as quickly as possible, leaving the Government to recoup the payout on their property from insurers.

Before yesterday's announcement, the Government had been accused of not informing people quickly and in detail of which land could and could not be used for rebuilding.

Now, there will be some dissatisfaction that the fate of 10,000 homes in the so-called orange zone is still not known. Some of this land was damaged by the June 13 aftershocks and has yet to be fully assessed.

The Earthquake Recovery Minister, Gerry Brownlee, has promised information on homes in this zone "over the coming weeks and months". He must stick to that timetable if he wishes to avoid another bout of understandable frustration.

The Government has also stayed mum on one especially ticklish issue, that of people whose homes were not insured. Mr Brownlee said the number in the red zone was small. Nonetheless, at some stage it will have to decide how much help will be given.

In the process, the Government must balance the natural inclination to be helpful with the realisation that throwing open the chequebook would create a moral hazard. People would see no reason to insure their homes if they witnessed a wholesale bailout by the Government. In large part, the extent of help should depend on the reason a house was not insured.

After the first earthquake, the Prime Minister pledged to stand behind Christchurch and ensure nobody was left worse off by an event beyond their control. New Zealanders left no doubt that they endorsed his sentiments, partly from a natural sense of goodwill but partly also because many lived in regions also susceptible to natural catastrophe.

If the worst happened, they, too, would want to have the country's enduring support. The net cost of yesterday's announcement - up to $635 million after payments from insurers have been received - represents a substantial commitment. But it is nothing less than the people of Christchurch deserve and New Zealanders would accept.