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Government funds for disaster relief a disgrace

25 August 2022

by Chris Leitch, Leader

Subject: Government funds for disaster relief a disgrace

The government needs to get serious with the financial support it provides for those areas of the country hit hard by the storms of the last week.

The support it provided for those affected by the floods in Ashburton was abysmal, especially when compared to the money dolled out in Covid wage support to dozens of big businesses who didn't need it, and the $572,000 it paid for a playground in the grounds of parliament.

Major infrastructure rebuilds are necessary and councils do not have the funds available to undertake the work that is necessary.

Funds are also necessary to get people and businesses back on their feet as quickly as possible and put in place stop banks and other measures to minimize the likelihood of a repeat of the flooding.

An initial non-repayable fund of at least $20 million needs to be provided for each of the hardest hit areas – Northland, and Nelson/Tasman.

The government could easily find the money required by drawing on the capacity of its own bank - the Reserve Bank - which proved it could supply funding when necessary, by creating more than $60 billion in the last two years for the covid recovery.

Sadly a major chunk of that $60 billion went into asset speculation, driving an insane rise in house prices and consequently fuelling inflation, rather than direct to the government.

The money for disaster relief could instead be credited directly into the government's account at the bank, as recommended to Finance Minister, Grant Robertson, in an aide memoir written by the Treasury and the Reserve Bank in May 2020.

The government should also revisit what it provided to residents, farmers, businesses, and councils in Ashburton and the Buller district and substantially increase it.

The likelihood of many more of these events is becoming evident so the government needs to organise funding for them now.

The mantra 'we don't have the money' does not wash any more, as the Reserve Bank's actions of the last two years prove conclusively.

Read the aide memoir written by the Treasury and the Reserve Bank in May 2020