Mai Chen: Quakes a true test of government

When a disaster strikes, people often put their faith in the Government to provide answers. Photo / Brett Phibbs

A natural disaster on the scale of the Canterbury earthquake could strike any city, so what can we expect of the Government if the same happened to us? Like many Kiwis I have family in the city, and know how traumatic and disruptive it has been.

Disasters change the nature of our relationship with Government. When citizens are vulnerable on the big issues about where they will live, what will happen to their biggest asset (their house), where will they derive an income and how will they meet their costs, including paying staff and rent for their business, Governments are in a unique position to assist. Normal laws may not be sufficient, and Governments often need to pass new laws granting extraordinary powers to prevent further harm and to aid recovery.

Government money is also needed to help people who would usually be self-reliant. A big insurer has even needed a government financial support package to meet claims resulting from the Canterbury earthquake.

At such times of heightened need, it is difficult for the public not to seek a hero to rescue them and the Government is the closest possibility at hand. They have higher expectations of the Government at the same time as the Government faces harder and more complicated issues. For example, what happens when whole suburbs cannot be rebuilt and have to shift? The Government needs to handle its relationship with affected citizens/voters more carefully to retain trust. Normal political management is not enough.

The Government moved quickly to legislate new powers to act in the best interests of Christchurch during the clean-up, shaking off the complaints from academics and others that they had moved too quickly, granting themselves broad and draconian powers, and had bypassed the normal checks and balances around lawmaking.

The Government's first attempt to set up an organisation to help Canterbury recover, the Canterbury Earthquake Recovery Commission, was criticised as having too few powers. After the second big earthquake, the Government established the Canterbury Earthquake Recovery Authority (Cera).

Its chief executive may carry out or commission "works" - a broadly defined term which includes the construction or demolition of any building. People have complained Cera has been too quick to use this power, and has demolished buildings without consulting owners. Cera can also close roads and prevent access to specified parts of Christchurch. Land may also be compulsorily acquired by Cera without reference to the Public Works Act 1982.

Cera certainly has extensive powers, but, as a department of state, some now criticise the body for being too closely aligned with the Government's reputation, and thus too constrained. They argue it should be an arm's-length body. The problem is the extensive nature of Cera's powers and the large amount of taxpayer money it is spending means the Government wants to have its hands firmly on the levers of control. If the money is not well spent and the recovery does not go well, then the Government will wear the consequences.

The Canterbury Earthquake Recovery Act 2011 also allows the minister to establish a Recovery Strategy and Recovery Plans for Canterbury, which dictate how Canterbury local government applies the Resource Management Act 2011.

The minister may also, after review by the Canterbury Earthquake Recovery Review Panel, grant exemptions from or modify the application of a range of statutes by Order in Council.

In addition to emergency law, the Government has committed a large amount of emergency cash. What is more it has engaged Mark Weldon to run an Earthquake Appeal to get donations from expatriate New Zealanders. The PM spoke at the appeal's fundraising dinner in Sydney this week. Tourism NZ has also been given extra money to woo overseas visitors who may be scared off by fears Christchurch (and New Zealand) is not open for business.

The Government has been circumspect in its actions regarding the major source of cash to rebuild Christchurch - insurers. The Earthquake Commission was created in 1993 to be an independent body whose funds are administered at arm's length from governments. Careful thought would need to be given before undermining that independence now by forcing the commission to extend cover to the uninsured. Nor can the Government control the actions of private insurance companies, unless, as in the case of AMI Insurance, those companies themselves seek financial support.

Can the Government afford more? In the year of the zero Budget, where New Zealand is borrowing $300 million per week, the answer is probably no. In any event, it is far from clear that further cash injections would speed up the recovery process. The Government's view, as expressed by Finance Minister Bill English in this paper last week, is that "there are other more significant issues at the moment which need to be resolved to allow the rebuild to continue - funding isn't the main one".

Although the Government does have a unique role in disasters, and can do a great deal, there are limits. We can expect emergency laws and emergency relief - in kind and in cash - good communication of as much real time information as possible. But these cannot mask what is in reality a tough situation with some stark and unpalatable choices for the people of Christchurch. Natural disasters are just that - a disaster.

* Chen Palmer partner Mai Chen is an adjunct professor at the University of Auckland Business School and author of Public Law Toolbox (forthcoming).