$15 billion hit to economy from quake

10:30 am on 4 March 2011

Prime Minister John Key says the New Zealand economy will take a hit of about $15 billion from the Christchurch earthquake.

Mr Key says that includes about $5 billion of lost tax revenue.

Initial Treasury estimates are for no economic growth to the end of June.

Mr Key says the resulting lower tax take compounds the financial pressure on the Government, which is already facing substantial costs from the earthquake.

Working For Families cuts considered

The Prime Minister has confirmed that cuts may be made to Working For Families to help pay the costs of the earthquake.

Mr Key says cuts for those on higher incomes could produce quite reasonable savings, but he says he has no idea exactly how much.

He says Working For Families and interest-free student loans are broad and generous policies, and all Government spending is now being re-examined.

However the Government is not considering what Mr Key describes as major or wholesale changes to the student loan scheme.