WATCH: Quake will likely cost more than $2 billion - PM

Author
Alex Mason,
Section
Leighton Smith Show,
Publish Date
Thursday, 17 November 2016, 12:28PM

The Government has announced its support package for businesses which have suffered a loss of income due to Monday's 7.8 earthquake.

It's stumping up a $7.5 million dollar wage package to help retain staff until a clearer picture emerges for key businesses like tourism.

It'll be paid for eight weeks to staff employed by businesses in Kaikoura, Cheviot, Rotherham, Mt Lyford and Ward.

Other areas affected by the quakes will also be considered for the subsidy which will be $500 gross a week for full time employees and $300 for part timers and it won't be subjected to GST.

It'll be backdated to Monday's earthquake.

Other assistance measures are expected to follow.

 

The Prime Minister said it seems highly optimistic to believe the cost of the Kaikoura quakes will be less than $2 billion.

But John Key said the government is in a good position to meet that cost, as it's back in surplus and tax revenue is running at a faster rate than predicted.

He told Leighton Smith while an earthquake depletes cash, it also stimulates the economy.

Mr Key said businesses like Fulton Hogan, Fletchers and various contractors will be busy spending money to carry out rebuild work.

"One of the reasons why we've been fiscally conservative and got ourselves back to surplus is for a rainy day - maybe we should have thought of it as a shaky say," he said.

He said in building a budget, there are many different moving parts to consider in what is a quarter-of-a-trillion dollar economy, and a $73 billion spend.

So this massive cost doesn't mean, for example, no tax cuts or family package.

"All I can tell you is if you think about it logically, it's definitely going to deplete some cash in the short-term, it's definitely going to have some impact on surplus, but doesn't rule everything out."

Watch Leighton Smith's full interview with John Key above

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