Government to spend $8.5b rebuilding Christchurch

5:59 am on 13 April 2011

The Government is to spend about $8.5 billion over the next few years rebuilding earthquake-hit Christchurch.

Finance Minister Bill English says the Treasury has estimated the direct cost of the quakes in September last year and February is about $5.5 billion, which will be fully provided for in the Budget in May.

He says about $3 billion of that relates to the Government's share of local government infrastructure, roads, insurance excesses on schools and housing, land remediation from the 4 September quake, demolition, ACC and the business support package.

Mr English told the Wellington Employers' Chamber of Commerce on Tuesday that the remaining $2.5 billion will cover expected costs, with the biggest expense likely to be land remediation the quake on 22 February.

The direct cost to the Earthquake Commission of meeting residential property damage from both quakes will be at least $3 billion, he says.

ANZ New Zealand chief economist Cameron Bagrie says the cost of rebuilding Christchurch will restrain government spending for at least the next five years.