Oh. My. Goodness.
Well, Labour today revealed their Christchurch policy. It’s ridiculous. It could only be written by a party that knows it has no chance of gaining power.
But their “plan” does have one fan.
Today Labour released its earthquake recovery policy. Where National’s “plan” is to basically sit back and let the market fix Christchurch,
Well, outside of the millions of dollars the government is pouring in and the work they did establishing CERA, the work they’re doing trying to get insurance back…
Labour seems to recognise that the market isn’t working.
Of course, if Labour wants to say something “isn’t working” then it just has to be the market. Hence the earlier (ludicrous) claim that the government is doing nothing.
Refusal to provide insurance is preventing rebuilding,
Which is in turn hampered by the science which suggest that providing insurance is financial suicide. But we can’t blame the facts now, can we?
while blatant price gouging is preventing Red Zone inhabitants from relocating within the city, basically forcing them to leave.
Strangely, no matter what the asking price on that land, it doesn’t change the fact that there isn’t enough of it to go around. The problem isn’t the price, it’s the shortage. The price merely reflects the shortage.
This is the way markets work. Because build-able land is so valuable, (in theory) we should have an increase in the supply soon. (In practice, government red tape may hold up this process.)
Labour plans to tackle this by threatening to intervene in the insurance market (the AMI bailout gives them an excellent vehicle for doing so),
I don’t think intervention is needed. In fact it may be counter productive.
What is needed is some sort of scheme that takes on a minimal amount of risk to get the region going again – a stop gap measure so to speak. If the government works with insurance companies by taking on some risk themselves, that may “prime the pump” and get the market going again.
Of course, this would be regarded as “bad” by idiot, who would be perfectly happy to see the entire nationwide insurance industry taken over by the government.
and promising to compulsorily acquire land to provide new sections for affected residents.
Well that’s a good idea. The New Zealand government has such a good record when it comes to land confiscations! How about we use the last government valuations to work out pricing – that’s worked well for the red zone!
(I must also have missed the part where people refused to sell their land. But I guess that is assumed, once the government tells people how much money they can charge for what is rightfully theirs.)
These are good policies, and while they will cost more in the short-term than the government’s present strategy, it will be worth it. Christchurch is too important to do on the cheap.
They will cost more in the short term. Also the medium term, and the long term.