Quake bill may mean policy changes

Bill English
Bill English
The Christchurch earthquake will test the Government's finances and policy changes are not being ruled out as the impact of the disaster is assessed, Finance Minister Bill English says.

Rebuilding the shattered city was the most important thing the Government would focus on this year, he said today.

"The Government has the commitment to do what is needed and we will find the resources to do it,'' he said at a press conference.

"We will pay for this by prioritising our spending on Canterbury... we aren't ruling anything in or out.''

Mr English was asked whether previously sacrosanct policies such as interest-free student loans and the Working for Families scheme were part of the Government's review, and he again said nothing was being ruled in or out.

"We're going to test the limits of where we go on government expenditure,'' he said.

"We haven't come to any conclusions... we need to give ourselves the room to see how we can find the cash without increasing our economic vulnerability.''

Mr English indicated some big infrastructure projects could be delayed because of the need to fund reconstruction in Christchurch but said the Government's fundamental plans would not change.

"You can expect a considered approach... we won't change the recipe significantly but we are going to have to test the limits of it.''

Mr English said all the options would be worked through over the coming weeks and months, and he was waiting for more detailed information from the Treasury on the cost of the damage in Canterbury.

"This is another economic shock on top of others and it simply underlines the necessity, rather than the desirability, of looking harder at the Government's priorities,'' he said.

"It's now absolutely necessary and we need to produce some fairly definitive results.''

Labour leader Phil Goff said there was no need for the Government to panic because Canterbury's recovery would take years and costs could be spread out over time.

"It would be wrong to cut financial assistance to families and students who rely on that support, especially when the cost of living is sky high,'' Mr Goff said.

"That would simply slow the economy down - we must keep money in the pockets of people who will spend it.''

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