Jenee Tibshraeny: NZ Herald Wellington business editor on homeowners needing to pay extra to fund the Natural Hazards Commission

Homeowners need to brace for another cost increase, this time to help fund the state disaster insurer, the Natural Hazards Commission.

The minister responsible for the commission, David Seymour, says levies will 'almost certainly' need to rise, with Cabinet set to decide the changes in the coming months.

NZ Herald Wellington business editor Jenee Tibshraeny explains further.

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Episode Transcript

Speaker 1 (00:00):
Now apparently the old EQC levees are going to go up.
David Seymour, Minister in charge of the commission, reckons Yep,
it's almost certainly going to have to rise. Generative Traineye
is the Wellington Business Editor and with us now, hey,
Jen a, hey, how much extra are we talking.

Speaker 2 (00:14):
About two or three hundred dollars more each year? So
currently those levees are set at about five hundred and
fifty dollars a year. That's we used to call it
the EQC, but it's now called the Natural Hazards Commission,
So so that that is, you know, proportionately quite a
large increase. Now, the reason that these levees need to

(00:34):
go up is because the Natural Hazards Commission simply hasn't
been able to you know, top up its coffers since
the twenty ten and eleven Canterbury earthquakes that all the
way back then, all the way back then. So basically
it only has about five hundred million dollars in its kitty, yes,

(00:55):
and if there's a big disaster it needs to cover
the first two point one billion dollars so before it's
reinsurance cover can kick in. So at the moment it
only has five hundred million in there. That leaves quite
a large shortfall before it's reinsurance cover would kick in. Okay,
so it's yeah, it's an interesting situation really because David

(01:16):
Seymore Well, he's the Minister responsible for the Commission. He's
also the leader of the ACT Party, and we know
that the ACT Party likes low taxes, small government. So
it's just he's put he's in an interesting situation where
he's the guy who needs to put these levees up.

Speaker 1 (01:32):
Does he have a range of options available to him?
Is it like it must go up by this march
or is it this much or the much of this much?

Speaker 2 (01:39):
You know, Yeah, he does have a range, and the
Treasury did a consultation with the industry earlier this year
and put forward a few different options. That's why that
we could see the levees go up by you know,
about between two or three hundred dollars a year. I
feel like, you know, David wouldn't tell me what he
was leaning towards, but I feel like he might put

(02:00):
them up by a lesser amount. The insurance industry has
raised concerns with the Treasury that if you put it
up too much, that's affordability issue, and the insurers are
worried that, you know, that means people might water down
the other insurance cover they have. The insurers also, yes,
they're probably they haven't said this, but I think they'd

(02:22):
be worried that, you know, because these levees attacked onto
your private insurance premiums. When you look at how much
you have to pay the insurer, you don't look at
which part of it is for the Natural Hazards Commission
and which part is for your private insurer. You just
see the total, and if you see the total go
up a lot, you probably point the finger at your
private insurer. So I can see why they might be

(02:43):
a bit hesitant as well about these going up going
too much.

Speaker 1 (02:46):
Janay, Thanks has always appreciated. Jane tob trainee, Wellington Business Editor.

Speaker 2 (02:50):
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