The Government is tossing up fresh regional support, pulling immigration levers and making legislative changes as it looks to ratchet up its response to Cyclone Gabrielle.
Cabinet is meeting on Monday afternoon to consider further steps in its initial response to the cyclone, having already sent money into disaster relief funds for east coast regions and to help farmers and growers hit hard.
Prime Minister Chris Hipkins said on Sunday the recovery will come “with a big price tag” and support will be made on an “ongoing process”, including through the Budget. Measures announced on Monday are “not going to be the final word on the matter”.
“It’s going to take us a while to identify exactly what the need is and we are going to be wanting to make sure we’re targeting the right areas in terms of additional support we’re providing.”
The National Party’s Christopher Luxon backs a wage subsidy for those impacted by Cyclone Gabrielle as well as looser immigration settings and emergency legislative powers.
Speaking from Auckland on Monday, Luxon said he “absolutely” supported a wage subsidy.
That’s a subsidy to assist businesses pay their employees’ wages for a certain period of time. They were offered up to those affected by the Christchurch and Kaikoura earthquakes. A wage subsidy was also granted to employers nationally during the COVID-19 pandemic.
Luxon said he wanted to see that released to Kiwis “very, very quickly” and the Government to implement several other measures.
“We need to make sure we also can relax the immigration settings so we can redeploy, say, the RSE workforce or forestry workforces to help with the cleanup,” he said.
“We need to make sure we’ve got the banks understanding they need to support these businesses because many of them are orchardists, [it’s]three years to get them back up and running again. They need to stand with their customers.
“I think also we need special provision legislation that has emergency powers so that actually we can have dedicated leadership focused on actually the recovery and making sure that the critical infrastructure is going to get built, a bit like we’ve seen in Kaikoura and Christchurch.”
The Government has provided immediate support to communities devastated by Cyclone Gabrielle, including $1 million to each of the Tairāwhiti and Hawke’s Bay disaster relief funds and $4 million to help farmers and growers. Other funds, like Civil Defence payments, are available.
Looking forward, Finance Minister Grant Robertson on Sunday told TVNZ’s Q+A the response would be more akin to the Christchurch and Kaikoura earthquakes than COVID-19 as the weather event “is quite regional” with a “number of regions involved”.
“It’s going to be the biggest weather-related event this century and it will have a multi-billion dollar price tag,” Robertson said, noting insurance companies would pay for some.
Support would be offered “sector-by-sector” and could also differ region by region, he said.
Prime Minister Hipkins said the Government wanted to target the right areas.
“Even businesses in the same area doing the same thing have been significantly disproportionately affected,” he said.
“The Minister of Finance today visited two orchards, one that lost almost all of their apples, another that had only lost about 20 percent of them and they were roughly in a very similar area.
“We’re gonna have to think about how we best support businesses to make sure we’re being responsible in the financial support we’re providing. But also we’re recognising there are some people in some pretty perilous situations.”
The Prime Minister also said there are often urgent legislative “quick fixes” after disasters, as was the case after the Christchurch earthquakes, to help make the rebuild more efficient.
“I expect there is likely to be a need for a legislative response. We won’t know what that is just yet, but I imagine in the next week or two or three or however long it takes, that will become a bit clearer.”
There’s also a need to get enough workers into the cyclone-battered areas to help with the rebuild.
Immigration Minister Michael Wood told AM on Friday more labour could be brought into New Zealand “if that’s what’s needed”.
“We’re going to have to pull on all of the resources available – both domestic and migrant workforce – and we will need to work very hard at that,” Wood said.
Every lever would be pulled to help, he said.
“This is a monumental task ahead of us so I’ve asked officials for further advice about what we will need to do to make sure we have the people for this incredibly huge rebuild that’s so important for the communities.”
He said the Government had the ability to create a special visa category if required.
“There’s a bit of work you have to do in these situations to make sure you’re really clear and understand the roles you actually need.”
Hipkins on Sunday said Wood was looking at “how best we can support getting workers in”.
“We know we’ve got a lot of workers in across the board already. One of the challenges as many of those workers who would be coming in for the rebuild can already get visas now.
“We’ve just got to make sure they’re fast-tracked so they’re processed in as timely a manner as possible. So many of the jobs we’re talking about, they’re on the Green List anyway, so they can get visas now, but we want to make sure the system is processing and turning that around as quickly as possible.”
While the cost of the recovery has yet to be estimated – and is unlikely to be clear for a while to come – it could be in the tens of billions.
Christoph Schumacher, Professor of Innovation and Economics at Massey University, told Newshub the hit to the economy could be between $10 to $20 billion.
Hipkins said it will have a “big price tag”.
“We will have to once again reprioritise and refocus our efforts and our resources. We will build back better but we will also need to build back more resilience than before.
“For far too long as a country we’ve under-invested in infrastructure and resilience and that has to change.”
He said, “the usual systems and processes of government are going to need to change and adapt to the extraordinary circumstances that we find ourselves in”.
Robertson has already confirmed it will affect Budget spending plans, with Hipkins saying it will mean “some of the things we might have been aiming to achieve, we won’t be able to achieve or we may have to achieve on a longer timetable.
“Clearly there’s going to be some big Budget calls that we’re going to need to make to make sure that we are providing the right financial support where it’s needed and when it’s needed. There’s gonna be a big capital bill for the Government,” Hipkins said.
That means some “fairly significant late Budget process decisions to make sure that we’re getting the resources allocated where they’re needed”,
In the longer term, ministers will have an eye on managed retreat and building infrastructure in more resilient areas.
“We need to do that with a much greater sense of urgency I think than we have ever seen before. This weather event has really highlighted that for me. It is going to be expensive,” Hipkins said last week.
“It is going to require some really big calls by Government to actually get the things happening that need to happen. We are talking about roading, we are talking telecommunications, we’re talking about electricity and energy.”
Luxon on Monday said a “very good assessment” is needed of how much money the recovery will cost, but he continues to stand by giving tax cuts to Kiwis. He also reiterated his doubt over the Government’s ability to deliver.