Policy report
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New Zealand needs to be better prepared for the next large natural disaster. Every kiwi knows, or ought to know, what to do in an earthquake. The government provides ample advice about securing our homes, maintaining emergency water supplies, preparing an emergency kit, and developing family emergency plans. But the Christchurch earthquakes of 2010 and 2011 demonstrated that the government itself was inadequately prepared for the substantial recovery task that follows any natural disaster.

While the government responded quickly, and in many cases performed very well under difficult circumstances, those circumstances were unduly difficult. The government had to create a recovery agency and build its governance arrangements from scratch during the disaster because no agreed off-the-shelf solutions existed. The Earthquake Commission (EQC) heroically scaled itself up to assess hundreds of thousands of claims, but it was a task that better initial arrangments would have made easier. Christchurch Council and central government worked to develop new city plans, but better long-term plans could have saved work and frustration. And government failed to appreciate the importance for recovery of minimising regime uncertainty. Prolonged uncertainty about the policy and regulatory regime – the rules under which people and business can operate – makes it difficult for people and businesses to recover. Recovering from a natural disaster is hard enough. Doing so while embroiled in avoidable disputes between EQC and your insurer over home repairs is harder. And if you are also trying to determine whether or not you will be allowed to rebuild your business premises downtown during years of changing central plans, things become more difficult still.

This report tallies the successes and failures of the post-earthquake recovery effort, so we can learn from both to do better next time. The most important way in which government can do better in the next disaster is by providing greater regulatory and policy certainty. Some of that requires better contingency planning before the event. We concur with the auditor-general that a recovery agency should have access to necessary “off the shelf” internal control and operational functions from Day 1. It should not have to develop them from scratch when the urgent and pressing needs are its external activities. Similarly, councils can incorporate disaster contingencies in their longterm plans.

Christchurch’s post-disaster downtown plan sought to remedy many long-standing issues off the hoof. But long-standing issues should be addressed through better democratic deliberation prior to a disaster. Pre-approved contingency plans would increase regulatory certainty in a post-disaster environment. Waimakiriri’s long-term plans illustrated how plans that provide sufficient room for growth allow councils to quickly zone new land for development after a disaster. Councils should, also as part of pre-disaster preparedness, designate elements of city plans that would be amended, suspended, or withdrawn in case of natural disaster. During the housing shortage that followed the earthquake, standing Christchurch Council prohibitions on secondary units in existing homes were not removed – preventing a simple way of quickly achieving necessary additional housing. Cities cannot afford these kinds of blocking rules during earthquake recovery. After the disaster hits, we argue that government should avoid setting precincts and anchor projects as part of any post-disaster recovery. They can consume massive amounts of bureaucratic and ministerial effort, while slowing recovery by thwarting the rebuild plans of affected property owners.

If government wishes to pursue anchor projects, planning and building functions should be separated so that delays in anchor project planning do not delay any revised city plan. Government should, however, be more active in obtaining declaratory judgements from the courts in test cases. Faster resolution of contractual disputes reduces regime uncertainty. Finally, recovery plans should be more respectful of underlying property rights. Recovery agencies’ planning should be constrained by appropriate use of the compensation principles in the Public Works Act.

Efforts to reduce the government’s costs in acquiring or impairing property can amount to a predatory tax and embody the illusion that what saves the government money saves the communities’ money, with the costs to affected owners given short shrift. Uncompensated takings can unsettle investor confidence. Appropriate compensation can also provide a constraint against planning over-reach. New Zealand learned a lot from the Christchurch earthquakes. Insurance arrangements are improving, and we expect more satisfactory outcomes for claimants in the next disaster. But there is more work to do.

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