Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's bid to discourage investment into flood prone areas of the country

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Jenee Tibshraeny: NZ Herald Wellington business editor on the Government's bid to discourage investment into flood prone areas of the country · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalks EDB. Follow this
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  Speaker 2: Sixteen past six on newstalks 'B. An inquiry into climate
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  Speaker 2: adaptation has seeing politicians of all stripes agree the government
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  Speaker 2: should not try to stop the values of properties that
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  Speaker 2: are vulnerable to the effects of climate change from plummeting.
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  Speaker 2: Through this, they're looking to discourage investment in flood prone areas.
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  Speaker 2: Seems to make sense, right. Janet Tibtrainey is the New
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  Speaker 2: Zealand Herald Wellington Business editor and it is with us
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  Speaker 2: this evening. Heyjan A, Hey Jack, So just explain this
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  Speaker 2: to us, because it's rare that we see politicians of
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  Speaker 2: all stripes agreeing on anything, but this does seem like
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  Speaker 2: a bit of a no brainer. Yeah.
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  Speaker 3: Look, I think this is interesting because this issue around
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  Speaker 3: how do we respond to climate change? You know, do
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  Speaker 3: we let communities stay in flood prone areas when there
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  Speaker 3: are big disasters? Do we bail people people out? Do
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  Speaker 3: we pay for them to relocate? If so, how much
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  Speaker 3: do we pay? Do we compensate them fully? These are
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  Speaker 3: really thought awny gnally questions, and I feel like politicians
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  Speaker 3: have been putting off addressing this issue for quite some years. Interestingly,
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  Speaker 3: now we have members of the Finance and Expenditure Committee.
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  Speaker 3: These are politicians from across the political spectrum agreeing to
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  Speaker 3: some high level principles around how we need to deal
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  Speaker 3: with this issue going ahead. So they've done this inquiry,
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  Speaker 3: they've released the report, they've agreed to some broad principles.
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  Speaker 3: These are the ones you sort of said in your intro. Jack. Basically,
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  Speaker 3: they're saying that that the government can't sort of stand
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  Speaker 3: behind property owners and it can't protect people's wealth. So
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  Speaker 3: if you own a property and your insurer decides, actually
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  Speaker 3: this is a very high risk area, your premiums are
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  Speaker 3: going to go through the roof. You might not be
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  Speaker 3: able to get some type of insurance cover. You know
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  Speaker 3: that it's really hard your property value your property value fools,
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  Speaker 3: it's unfair, it's not fun situation to be and thus
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  Speaker 3: saying well, we can't really do anything about that, and
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  Speaker 3: in fact, we kind of need to see the price
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  Speaker 3: of properties reflect the risk, and if the pricing reflects risk,
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  Speaker 3: that will push people to live in in safer areas.
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  Speaker 3: So it's actually quite a bold statement they're making just
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  Speaker 3: as a high level principal.
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  Speaker 2: Comment, Yeah, what are the insurers saying.
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  Speaker 3: Look, the insurers are welcoming this. They want some direction
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  Speaker 3: because you know, they're at the front line of this.
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  Speaker 3: They're getting flat because they're adjusting premiums in line with risk.
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  Speaker 3: They think it's great that politicians are signaling that they
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  Speaker 3: might take some sort of lead. I think insurers will
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  Speaker 3: also be pleased that politicians support risk based pricing. You know,
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  Speaker 3: they support making people who are have properties in higher
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  Speaker 3: risk places pay more because that is the you know,
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  Speaker 3: that is the approach insurers have been taking, and there's
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  Speaker 3: always some debate around that because you know, do you
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  Speaker 3: really make people pay what their risk really is or
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  Speaker 3: do you share some of those costs? You know, do
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  Speaker 3: you have a bit of cross subsidization. So it sounds
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  Speaker 3: like the politicians are aside with that. But you know,
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  Speaker 3: this is all just commentary and a report that the
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  Speaker 3: committee has published. We yet to see any government policy
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  Speaker 3: or laws or anything like that that really gets into
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  Speaker 3: the nitty gritty of how do we deal with this. Now,
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  Speaker 3: just one more thing in this jack that the committee
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  Speaker 3: members say that ultimately this is going to cost us money.
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  Speaker 3: You know, if we're paying to relocate people. For example,
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  Speaker 3: if there's another big storm, then we need to think
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  Speaker 3: of ways of generating money to pay for that. Now,
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  Speaker 3: to me, that sounds like there might be some sort
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  Speaker 3: of future tax or levy to pay for it. So
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  Speaker 3: that's the sort of gnally end that needs to be
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  Speaker 3: worked through.
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  Speaker 2: Perhaps less likely to be political consensus on that point today.
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  Speaker 3: Well, exactly, exactly, all.
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  Speaker 2: Right, hey, thank you. That is really interesting to training
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  Speaker 2: the New Zealand heralds Wellington Business Editor. It's just gone
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  Speaker 2: twenty past six on newstalk's 'b For.
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