Figures and comments show that it is not going well in Canterbury, five years after the earthquake sequence began. With the latest figures out from the Insurance Council (3 News, August 10th, 2015) it is time to look at the real progress we have made in the past five years (since September 4th, 2010). Of course we all want to have a sense that after five years some progress has been made! We prefer good news over the bad. In fact we have developed a specific language to suit what it is we want to hear: we replace the word ‘emergency’ to describe our predicament in Canterbury with’ recovery’, ‘demolition’ with ‘rebuild’, and we have recently added to the mix ‘regenerate’. To the outsider it must seem as though we are making headway and that the situation in Christchurch has become less of a worry. But are we making headway? And does New Zealand want to know? Even the Government is growing quiet about the situation here. During a recent visit to Christchurch, the Prime Minister John Key, admitted that Christchurch is facing a ‘two steps forward, one step back’ situation in its slow journey toward recovery (The Press, April 17, 2015). That is a far cry from a Government that made the Christchurch rebuild a critical part of its agenda (Tim Fulton, The Press, April 20, 2015) five years earlier. Ever since the city was ‘gifted’ four anchor projects the Christchurch City Council has been struggling to accommodate this donation which was agreed to by the previous Council – at a time when dreams about the future superseded any sense of reality.
Why would one create an oversized convention centre when Air New Zealand in Christchurch is pulling out its’ long distance flights to and from Japan and Asia? Why build a multimillion dollar football stadium when the AMI stadium (Lancaster Park) can be repaired for much, much less? In the meantime building firms are hitting the wall as increasing numbers went bust this year, leaving homeowners, contractors and the tax man millions of dollars out of pocket (The Press, March 29, 2015). People speak of the ‘Rebuild Black Hole’ and it is not only about builders going bust, but it is also becoming clear that the quality of many repairs and rebuilds have been done sub standardly, revealing shoddy works as cracks reappear and floors remain out of level (The Press April 20, 2015). Homes are now being ‘quietly’ revisited and earlier repairs are being mitigated; earlier assessments of those properties still waiting reinstatement solutions are now being pushed ‘over the cap’. This will in turn cause more delay for the homeowner. Acting chief executive of CERA, John Ombler, acknowledged at the Seismic and the City conference in March 2015, that the recovery could well take another 10 to 20 years. On a similar note Peter Townsend, CEO of the Christchurch Chamber of Commerce, said that the region is ‘one quarter of the way to recovery’ and that after the initial building boom, Canterbury firms are now taking a more strategic view to growth as delays and increased bureaucracy are causing significant frustration (The Press, April 1, 2015).
Of course we can put a spin on all this; we can spice up the appearances of a City Council that is struggling to make ends meet, of communities and residents struggling with land issues, flooding, school closures, social housing and more. But how to find a way out of the mess? EQC came up with a solution. In April 2015 EQC announced that affected home owners had to finalize a repair agreement before June 1st 2015 or face a full or partial cash settlement. Low and behold: a cash settlement as the threat. Haven’t seen that one of those before! No wonder that this EQC deadline has been causing affected homeowners stress (The Press April 16, 2015). The private insurers are now also pressing for cash settlements, but they have put even more thought into how to carefully approach this. IAG for instance has started an advertising campaign in the papers in which they proclaim the advantages of cash settlement as a way of assisting the homeowner to move forward with their lives. They play the card ‘you have been waiting long enough’. This approach is more thoughtful than EQC’s blunt approach. The private insurers too have set themselves deadlines. These cash settlements come close to a similar threat, but in disguise. Does it work? Damn right it works! In the quarter to June of this year the private insurers have cash settled considerably more claims than in any other previous quarter. Actually over time the private insurers have cash settled some 12,000 of their 24,527 claims, that is nearly 50% of all claims. That is how the private insurers will meet their self-imposed deadlines and preserve their profits. In total they have settled 16,000 claims thus far, indicating that only some 4000 claims are deemed settled by building work completed. From these figures one can also conclude that some 8527 over cap claims still need to be settled. That is a third of all claims. After five years this is an extraordinarily high percentage.
For reasons which are hard to believe, Mr Tim Grafton, CEO of the Insurance Council (who collects the data on a quarterly basis), blames the negative coverage in the media for the existing frustration among homeowners. Dear Mr Grafton, Campbell’s Live show was canned on April 13th of this year. It must have come as a relief to you that the voice of the only advocate, John Campbell, who persisted in supporting the plight of the earthquake affected Cantabrians is off the national screen. So there are no longer ‘negative’ voices to be heard on the national stage. Mr Grafton also blames EQC for the delays by pushing many damaged properties ‘over the cap’ and thus adding to the work load of the private insurers causing more delays for the homeowner. I have attempted to find out how many properties were actually pushed ‘over the cap’ in recent times. The number of claims handled by the private insurance industry we are told is 24,527 in 2015. In October 2013 the Insurance Council provided us with the figure of 24,660 claims. So apparently in 2013 the private insurers had more claims on their books than they do in June 2015! So how can it be that the number of EQC claims ‘pushed over the cap’ is as large as Mr Grafton maintains? Or has the Insurance Council got its’ figures wrong, both in 2013 and again in 2015? Besides, Mr Grafton will remember that during the apportionment phase of 2012 and 2013 the private insurers did their very best in many instances to try to push some of their claims ‘under the cap’, back onto the books of EQC.
In short, after five years, it is not going all that well in Canterbury. Regardless of all the spin – people, homeowners, Council, businesses and the Government are still struggling to come to terms with the aftermath of the Canterbury earthquakes. It is time for a reality check! May honesty and common sense prevail and be celebrated in the year to come.