Govt 'ready to borrow more' to meet quake costs

8:40 pm on 23 February 2011

The Government's Debt Management Office says it is ready to borrow more on world markets to meet the costs of the Christchurch earthquake if needed.

It has been able to borrow normally on world money markets since the quake hit on Tuesday causing widespread devastation.

The Government has borrowed most of the $13.5 billion it had planned for this fiscal year which still has five months to run.

Phillip Coombes from the Debt Management Office says it had been ready to review the borrowing limit before Tuesday's quake. He says it could increase its borrowing limit for the current fiscal year if required to meet repair costs.

Prime Minister John Key says the earthquake will have a big impact on the Crown accounts.

He says it is going to be some time before central Christchurch is operational again.

Mr Key says the impact on the Government's books are two-fold, one being the money needed over and above that provided by the Earthquake Commission.

The second is the delay in rebuilding the city centre as every building will have to be assessed. He says it is crucial that workplaces are given a clean bill of health before people can return to work.