Nationwide quake tax a possibility - Key

7:08 pm on 25 February 2011

Prime Minister John Key has again said he cannot rule out imposing a nationwide tax to help rebuild Christchurch.

But Mr Key told Morning Report a decision on any post-earthquake tax would not be made immediately, and is not a priority.

He said he wouldn't want people to interpret his remarks as softening them up for a levy.

Mr Key says the Earthquake Commission still has about $6 billion in the kitty, and reinsurance is in place.

The Australian government has imposed a levy on taxpayers earning more than $50,000 a year, with the rate rising for those on more than $100,000, to help pay for the recovery from the country's devastating floods.

Mr Key says the Secretary of the Treasury is travelling to Christchurch on Friday and can begin reviewing the situation.

The Green Party has signalled supports for the idea of a special tax. Co-leader Russel Norman says an extra 1% tax could be added to income between $48,000-$70,000 and 2% above that, raising $920 million a year.

Economists from the major banks say the Government has room to increase borrowing to meet earthquake costs without levying a one-off tax.

However, Revenue Minister Peter Dunne questioned whether a special tax is necessary and says it would be particularly complicated to impose if it excluded people living in Canterbury.