24 Jun 2011

Firms in Christchurch red zone 'will need help'

1:02 pm on 24 June 2011

The Canterbury Employers' Chamber of Commerce says the Government's plan to buy thousands of quake-devastated properties will leave some businesses stranded and in need of specific assistance.

On Thursday, the Government offered to buy 5100 of the worst affected insured properties in the residential red zone. These properties are in the east of Christchurch, along the Avon River, in the north-east of the city such as Brooklands, and in the beach area of Waimakariri District, such as Kairaki Beach.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend says it is a positive step but says location-specific companies in the red zone will have a number of questions.

Damaged businesses will claim insurance and move on, he says, but hundreds will be effectively stranded because houses move away from their location and will have to be dealt to.

Mr Townsend says many of these are very small businesses operating from home, such as plumbers, and may transfer their businesses with their homes.

He says the Government move does offer more certainty to most businesses - as insurance and land issues can now progress in the green zone, where there is no significant land damage.

And he says definitive information about land quality in the white zoned central city will be released before the end of the year.

Mr Townsend says fast progress is being made there as work continues that will enable businesses to figure out when and where rebuilding can occur.

Postive step

ANZ chief economist Cameron Bagrie says the announcement provides much needed certainty to Christchurch people, which in turn will help boost the economy.

He says although the Government is running a large fiscal debt, this is the right time to lean on its balance sheet.

Mr Bagrie says there is the slight risk homeowners will just take the money and head overseas, however the announcement should help get residential rebuilding moving a bit earlier, which will be important for job prospects in the region.