Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's bid to discourage investment into flood prone areas of the country

Politicians of all stripes say the Government shouldn’t try to stop the values of properties vulnerable to the effects of climate change from plummeting.

In fact, they believe there is room for at-risk property values to fall further to discourage investment in flood-prone parts of the country.

NZ Herald Wellington business editor Jenee Tibshraeny unpacks these findings further.

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Episode Transcript

Speaker 1 (00:00):
Sixteen past six on Newstalks. He'd be an inquiry into
climate adaptation to seeing politicians of all stripes agree the
government should not try to stop the values of properties
that are vulnerable to the effects of climate change from plummeting.
Through this, they're looking to discourage investment in flood prone areas.
Seems to make sense, right. Janet Tibtrainey is the New
Zealand Herald Wellington Business editor and is with us this

(00:21):
evening agen A. Hey, Jack, so just explain this to us,
because it's rare that we see politicians of all stripes
agreeing on anything, but this does seem like a bit
of a no brainer.

Speaker 2 (00:30):
Yeah. Look, I think this is interesting because this issue
around how do we respond to climate change? You know,
do we let communities stay in flood prone areas when
there are big disasters? Do we bail people with people out?
Do we pay for them to relocate? If so, how
much do we pay? Do we compensate them fully? These

(00:50):
are really thorny gnally questions and I feel like politicians
have been putting off addressing this issue for quite some years. Interestingly,
now we have members of the Finance and Expenditure Committee,
these are politicians from across the political spectrum agreeing to
some high level principles around how we need to deal
with this issue going ahead. So they've done this inquiry,

(01:13):
they've released the report, they've agreed to some broad principles.
These are the ones you sort of said in your
intro Jack. Basically, they're saying that that the government can't
sort of stand behind property owners and it can't protect
people's wealth. So if you own a property and your
insurer decides, actually this is a very high risk area,
your premiums are going to go through the roof. You
might not be able to get some type of insurance cover.

(01:36):
You know, it's really hard your property value your property
value fools, it's unfair, it's not fun situation to be.
And they're saying, well, we can't really do anything about that,
and in fact, we kind of need to see the
price of properties reflect the risk, and if the pricing
reflects risk, that will push people to live in in

(01:56):
safer areas. So it's actually quite a bold statement they maying,
just as a high level principal comment.

Speaker 1 (02:03):
Yeah, what are the insurers saying.

Speaker 2 (02:06):
Look, the insurers are welcoming this. They want some direction
because you know, they're at the front line of this.
They're getting flat because they're adjusting premiums in line with risk.
They think it's great that politicians are signaling that they
might take some sort of lead. I think insurers will
also be pleased that politicians support risk based pricing. You know,

(02:27):
they support making people who are have properties in higher
risk places pay more because that is the you know,
that is the approach insurers have been taking. And there's
always some debate around that because you know, do you
really make people pay what their risk really is or
do you share some of those costs? You know, do
you have a bit of cross subsidization. So it sounds

(02:50):
like the politicians are as siding with that. But you know,
this is all just commentary in a report that the
committee has published. Were yet to see any government policy
or laws or anything like that that really gets into
the nitty gritty of how do we deal with this? Now,
just one more thing in this jack that the committee
members say that ultimately this is going to cost us money.

(03:13):
You know, if we're paying to relocate people, for example,
if there's another big storm, then we need to think
of ways of generating money to pay for that. Now
to me, that sounds like there might be some sort
of future tax or levy to pay for it. So
that's the sort of Gnali end that needs to be
worked through.

Speaker 1 (03:31):
Perhaps less likely to be political consensus on that point. Jenay, Well,
exactly exactly. All right, Hey, thank you. That is really
interesting genative training the New Zealand Herald's Wellington business editor.
It's just gone twenty past six on Newsbork's 'db For
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