Mike Hosking: 12 million reasons why this Government earthquake payouts are dangerously naive

COMMENT: The Government this week set a very dangerous precedent - in fact a number of them.

A crackdown on CEO bonuses was just silly, it's hard enough getting good people into the public sector, far less making them pay for the experience.

But way more naive and dangerous than that, was the Christchurch quake payout to the so called 'outcasts'.

These people, as much as you might feel for their plight, chose not to have insurance. And when trouble struck, instead of owning up to their decision and living with it,
they wanted the government to bail them out to the tune of $12 million.

The previous government offered them the value of their land, which seemed fair, given the land is beyond your control.

But your house and its contents are not.

So off to court they went and it's been stuck there ever since.

But this Government, in its seemingly never-ending desire to spend other people's money without ever considering the downstream consequences, is happy now to hand out millions.

Ironically given it's based on the 2007 ratings numbers, close to when the event happened, not all the people are taking it.

They want 2018 numbers - proving beyond a shadow of a doubt we live among some who literally want their bum wiped from cradle to grave.

Anyway the danger here is the precedent: you clearly no longer need insurance because if calamity strikes, Megan Woods will pay your bills.

And this comes at a time of great change in the insurance industry, a time in which they are, in some cases, changing dramatically the bills people face.

If you live on a cliff, or beach, or near water, or a flood zone, your bill is going through the roof.

It is risk-based, and at least on the surface it seems not unfair.

But what happens when everyone gets a big new bill, decides not to pay it?

You have the trouble America has had for decades, where you have a large group of the uninsured, and when disaster strikes lives are wrecked, hence the original value of insurance.

But in sending the message as the Government has that you don't need to worry, you are now encouraging people to actively avoid covering themselves.

People like the bloke in Christchurch last week whose premium goes from $2000 a year to $12,000. Why when Megan is hovering, would he bother ever writing a cheque again, when we are writing the cheque for him?

I'm sure Megan thinks she's done a nice thing. But she's done it with our money, and with scant regard for the can of worms she's opened.