Where can the money come from to rebuild Christchurch?

Rebuilding Christchurch will not be cheap and there must be major contributions from a number of sources, not just Christchurch ratepayers, Mayoral candidate Jim Anderton said today.

He wants Christchurch City Council to issue Canterbury Earthquake Recovery Bonds to help rebuild the city.

The bonds would complement funding from central government and EQC.

“Bonds are needed to complement both these sources of revenue because we have to take ownership of solutions to the challenges we face,” Jim Anderton says.

“The burden of rebuilding our city will have to be shared by all New Zealanders. This is a ‘no faults’ crisis and no-one should be penalised under such circumstances. Successive governments have allocated around $10 billion for Auckland’s motorway system. Rebuilding Christchurch’s water and sewerage systems, roads, character and heritage buildings is no less important than Auckland’s motorways.

“The second call on a ‘New Zealand Wide’ pool of funds is the Earthquake Commission. The EQC should be able to assist from its reserve funds. If it can’t do so under existing legislation the act should be amended. Parliament does that every day.

“But we will need more than central government and the EQC together will provide. Bonds should be issued to both the wholesale and retail (Kiwi Mums and Dads) markets to allow the people of Canterbury – as well as the rest of New Zealand – to invest in our recovery, rebuild and restoration.

“Backed by the rating base of the City of Christchurch, these bonds would be an attractive long-term investment option compared to some of the finance companies of recent times.”

The ‘Bonds’ could have the following features:
The first Bond issue would be for $100M plus provision for oversubscription up to $200M.
Canterbury residents would have first preference for the issue. Interest would be set at a competitive market rate and paid quarterly

The Bonds would mature after 10 or 20 years, with interest rates re-set after 5 years.

The Bonds would be used to assist rebuilding of housing where soil conditions permit, restore the character and heritage of the city, and enhance damaged infrastructure.

25% of the brokerage fee could be donated to the Mayoral Welfare Fund - $250,000 for every $100M raised.

0.25% of the market increase rate would also be deducted and donated to a special ‘Charitable Trust’ each year to help rebuild Christchurch.

Brokers and Bond holders could have the option of donating part or all of their fees and interest to the Charitable Trust set up for the restoration and rebuilding of Christchurch and the Canterbury region.

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