In response to the costs associated with the earthquakes, the Government’s June Budget incorporated an increased focus on fiscal consolidation with a reduction in new discretionary spending over the coming four years.
In addition, the Government has recently announced an increase in the earthquake cover levy component of home insurance, to cover the costs faced by the EQC and to rebuild its Natural Disaster Fund. Banks and other financial institutions may have to absorb bad debts from some households and businesses as a result of the earthquakes.