Bill English: Tax cuts still possible despite earthquake bill
Acting Prime Minister Bill English says tax cuts are still on the cards despite the billion-dollar cost projection for repairing earthquake damage.
The Government had previously announced a $1.8 billion surplus and Bill English told Paul Henry the tax cut plan hasn't changed just yet.
"We haven't taken them off the list, we still haven't got the earthquake numbers, [we are] still finalising a view about this economy that is running a bit stronger than we thought."
Repair costs for the Kaikoura earthquake have already been estimated in the billions but the total bill won't be known for a while yet.
"We have this half-year update in the next couple of weeks, which will give a snapshot right now and then there's a serious round of digging, particularly into the earthquake numbers, for the Budget next year.
"That's when we will have a clear answer."
Mr English says the Government has learnt from the last major earthquake that it pays to be cautious about repair costs.
"In Christchurch what we found was that as time went on, more damage became apparent and we've ended up spending quite a lot more in Christchurch than we initially estimated.
"This of course is significantly smaller in scale but nevertheless, you don't get to see all of the damage at the start."
Mr English says taxpayers won't be responsible for all costs.
"If you think of things like the port that is damaged in Wellington, they will be insured and that will be a cost to recovery - [but] the taxpayer won't be paying for it."
"The taxpayer will be carrying recovery [costs] in Kaikoura but the big cost is going to be getting the roading sorted out. It will take while to get to the bottom of the numbers."
State Highway 1 on the Kaikoura coast was decimated by the earthquake with slips and cracks metres wide making the road impassable.
One of the world's leading civil engineers believes it could be years before SH1 can be repaired, while Prime Minister John Key has considered moving the road inland.
Despite the unexpected costs, Mr English has faith in the country's economy.
"We have to see where the numbers come out. The economy has been running a bit stronger than we expected. Tax revenue looks like it is going to be up somewhat."
Speaking to media at the APEC summit in Peru, Prime Minister John Key echoed those comments.
"I don't think the earthquakes as they currently stand would, over the medium-term, stop us from doing other things."
"When we get a better assessment of how much it's going to cost, it will be one factor that has some impact on our capacity to move in the short-term, but probably not in the medium term," he said.