New Zealand Labour Party

EQC accounts show surplus slipperiness

EQC’s annual accounts raise serious questions for the Government about how they have appeared to reach a Budget surplus by reducing EQC’s estimated liability in Canterbury by nearly $500m, says Labour’s Finance spokesperson Grant Robertson.

“The Government has been crowing about its wafer thin surplus, but reducing EQC’s estimated liability for the Canterbury earthquakes might leave the taxpayer exposed to future costs.

“It is incredibly hard to believe $500m is not needed for EQC’s work in Canterbury. With the state of many of EQC’s repairs in Canterbury being questioned and so much uncertainty remaining, this reduction may misrepresent the potential future liability that still exists.

“Private insurers continue to experience increased liability, but EQC is reducing its own. That does not seem right. It’s just too soon to start writing down the expected liability in Canterbury when there’s so much more work to be done. It’s irresponsible.

“The Government had a political target of a surplus in 2014/15.  It has made clear there will not be a surplus next year, and on the surface it appears to have manufactured a surplus by sweeping the extent of future costs of EQC under the rug. But hundreds of millions of dollars in future costs don’t just disappear because the Government’s accountants move numbers around.

“The full cost of repairing earthquake damaged homes will still have to be paid for by the crown. Bill English and Gerry Brownlee need to give an assurance the money Cantabrians need for their repairs will be available,” Grant Robertson said.