I sometimes honestly wonder how Idiot can be so uninformed. It’s frankly amazing just how wrong he can be sometimes.
In the past year, a series of earthquakes has devastated our second largest city. But with the recovery supposedly well underway, you’d expect the building industry to be working flat-out fixing all those houses and building new ones, right?
Thus far, everyone agrees. The building industry should be humming, but is not.
This can be put down to one thing: policy failure by the government. They have allowed the insurance industry to refuse to insure in Christchurch, effectively stalling the rebuild in its tracks.
Say wa??? “Refusing to insure Christchurch”? Where the heck does that come from?
The building industry is a big driver of economic growth, so the entire economy will pay the price. Meanwhile, the skilled and highly mobile workforce we need for the rebuild will up sticks and move to Australia to find work.
Again, no disagreement here. Only I thought that Idiot believed that government is the be-all and end-all of economic growth. Seems not.
The government has some levers it can pull here. For example, it could compulsorily acquire AMI under the terms of its bailout, seizing control of 90% of the Canterbury insurance market.
Now this one is outright wrong. If your sniff test is as off as Idiot’s, let me quote some actual figures:
The mutually-owned and Christchurch-headquartered AMI has a 30% share of the insurance market for houses, contents and cars in Christchurch, meaning it has the largest exposure of all insurers to residential damage. AMI did not provide commercial insurance for businesses most affected in the city centre.
So they have a mere 30% of the residential market, and aren’t even in the commercial insurance business at all. Figure that in, and the cover provided by EQC and I’m guessing you’re getting pretty close to single figures percentage-wise.
Or to put it another way, Idiot’s 90% figure is 90% wrong.
It could then use that control to provide insurance cover for the rebuild, and to push the rest of the industry into doing the same.
Again, I have no idea what this “insurance cover” phrase is being used to mean. Insurance cover is something you have, or do not have. About 95% of people had insurance (from what I’ve heard) meaing that they were covered. Peroid.
Perhaps he means that the companies have not paid out yet? Yet many have – I spoke to one woman who reported that her neighbours had reiceved multiple $100,000 payments from EQC. Thousands of people are living in houses paid for by their insurance companies. Payments are being made as full assessments are being made, but the sheer size of the disaster means it takes time – even if you vastly increase your claims staff as many companies continue to do even today. But if he meant to force payouts, that’s what he should have said.
Perhaps he means that the companies are refusing to provide cover for the new buildings to be rebuilt, or purchased to replace? There’s certainly been a good fuss made over companies refusing to write new policies. But the reason for that is quite simple: they just can’t cover their risks. Insurance companies need risks less than certainty, as do reinsurance companies. Forcing companies to provide insurance that isn’t commercially viable will simply lead to companies shutting up shop and leaving the country, and no one would be any better off.
But that sort of bold intervention is contrary to National’s “do nothing” economic ideology. And instead so they’ll leave Christchurch in ruins, and the economy to burn. After all, they have jobs (not to mention taxpayer funded houses, travel and everything else). As for the rest of us, well, we’re just not their concern.
Now we get to the heart of the matter: Idiot is blaming the private sector so he can attack the National government for leaving them alone to get the job done. Leftys just love painting conservatives as heartless. It’s what they live for. It’s their thing.
The irony is that the insurance companies are not doing nothing. They are furiously expanding, assessing and looking to rebuild. I’ve seen this with my own eyes. Now they can do this because they know what they have to do, and the regulatory framework they have to do it in.
The irony is that if National did what idiot wanted them to, all that work could potentially go to waste. Changing regulations mean that time has to be taken in order to understand what those changes mean in specific circumstances. That creates uncertainty. It’s certainty that allows business to operate. But don’t take my word for it – just ask anyone in the orange or white zones what uncertainty does.
Placing the blame where it really lies would just be too difficult. Because you see the real problem is red tape. The real problem is the government that Idiot so loves, making sure it’s boxes are ticked, while it saves people from themselves.
Or I may be wrong, and I missed the Christchurch City Council’s announcement of approval for a major new subdivision to house those affected.
Update: Ok, it may be that Idiot is referring to the fact that new houses can’t get insurance. I suspect this because Gerry Brownlee is in London (as per One News tonight) trying to convince the companies to insurce Christchurch.
Oh wait, he’s doing stuff? Well there goes the “National is leaving people to suffer” theory and associated rambling.
But this isn’t why houses aren’t being built. You can’t build houses if you don’t have land, and the land isn’t being made available.
And even if it was because of the insurance industry, nationalizing it is simply going to mean that the government socializes the risk, and privatizes the benefits. Hm, where have I heard that before?
In short, its a typical National Party policy: socialise the costs, privatise the benefits, and funnel money from the poor to the rich. We let them get away with this once in the 90′s; we shouldn’t let them do it to us again.
You can’t win, can you?