Flood victims will not be on their own, says chair of contentious report

RNZ News

6 days ago

There will always be a role for the government in alleviating hardship, says the head of a panel that looked at how the government should adapt to climate change.
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RNZ
The chair of the panel behind a contentious report on how the government should adapt to climate change says its authors never meant that flood victims should get no help from the taxpayer.
The report was criticised
for leaving people to manage their own flood risk after a transition phase of possibly about 20 years.
But Matt Whineray says there will always be a role for the government in alleviating hardship, beyond the initial disaster response.
"I think the government will always have a role in alleviating hardship - that's my view and that's the discussion we had at the reference group - but most critically it's not linked to the property value."
Whineray said councils and central government could not keep buying properties at market rates when they were not suitable for rebuilding and were not covered by private insurance.
He cited overseas examples of homes being rebuilt in the same place six times, with the government as the default insurer.
Whineray said that did not mean people should be left on their own, even after a cut off date, and even after homeowners have been supplied with the best available risk information.
He said currently there was an unofficial but powerful assumption that people will be compensated to their full pre-flood value - an expensive proposition for tax- and/or rate-payers, as climate change and poor development decisions increase the number of ruined homes.
But Whineray said there were other ways to supply compensation, like capping the amount people can get for relocation assistance.
"It's just how you determine how you do that and step away from a world where you say someone gets to get $5 million because because that's what they thought it was worth the day before the event happened.
"There will be an impact (on property prices)," he said.
"If you moved directly to a world where there is no automatic buyout, you have that abruptness. The idea of the transition period is to smooth the impact.
"At some the point in the future where the government is no longer underwriting those property values, that will have been reflected by the market."
Canterbury University Professor and climate scientist Dave Frame has been studying how much worse extreme events are getting on a hotter planet, and how much worse they might be expected to get in different parts of the country.
He said he understood why some experts wanted a fund for property buyouts, and he also understood why others were wary of promising guaranteed compensation.
"Often the people who are most adept at tapping into those funds are the kind of people who've been climate sceptics their whole life, brought a low lying property and now want to exit without paying a bill. It's the classic moral hazard," he said.
"It's actually a really subtle one for the government to find a way of exercising prudent judgement, like it seems to me to be pretty clear that the people up Esk Valley weren't being unduly risky in in their behaviour."
Professor Jonathan Boston of Victoria UNiversity led a previous report on how to stage a planned exit from the most risky areas.
That report said financial help was needed to avoid worsening inequality and keep communities functioning, but the primary goal should not be restoring people's full wealth.
Boston agreed that offering uncapped compensation or government insurance encouraged people to stay (and build) in places they should not, and said councils often struggled to stop them.
But he said many people would not have the money to leave on their own, without some government assistance.
"Some people will have mortgages and they run the risk of being left without any equity, in fact in debt, other people might not have a mortgage but the property might be unsaleable so they have no means of purchasing another property... they are in what a colleague has called property purgatory."
Boston said he found it mind boggling that society would allow people with kids or serious disabilities to stay in harm's way, as councils withdrew sewage, water and road maintenance.
He did not believe the decision to exit can be left to individual choice, even once people have access better access to risk information.
"With sea level rise, more powerful storms and so on, if you look out decades and indeed centuries fro now, tens of thousands if not hundreds of thousands of properties in New Zealand are going to be vulnerable to one kind of flooding or another, or other hazards, and if there's no assistance to help people move, well it's pretty clear that we're going to have a hell of a mess."
The environment ministry is working on options to present to the government, on how to move from today's ad hoc regime to something more financially sustainable.
What that looks like and who pays still is not clear.
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