Repair bill from cyclone and Auckland floods at least $9b, Treasury estimates

Thursday, 27 April 2023

Treasury’s estimate of the damage to physical assets from Cyclone Gabrielle and the Auckland floods includes insured losses.

The Treasury estimates the repair bill from Cyclone Gabrielle and the Auckland floods that preceded it in January will add up to between $9 billion and $14.5b.

It estimated the damage to residential property at between $2b and $3.5b, the damage to businesses at between $2b and $3b, and that the damage to public infrastructure would tally up to between $5b and $7.5b.

The estimates include the costs of both insured and uninsured damage.

The Government has repeatedly signalled a few-frills Budget.

* What has the cyclone cost and would a tax levy make any difference?

* Federated Farmers puts farm damage from cyclone at about $1 billion

Prime Minister Chris Hipkins on Thursday ruled out a cyclone levy, which was believed to have been in the mix earlier this year, to help pay for the latter bill.

Calculations by Stuff suggested that a temporary levy similar in design to one imposed by the Australian government in 2011 to help pay for the damage caused by Cyclone Yasi in Queensland could have made only a small contribution of a few hundred million dollars.

Much of the Government’s repair bill would be accounted for by damage to transport infrastructure such as roads and bridges and water infrastructure, the Treasury said.

In addition to the cost of fixing physical infrastructure, if that was indeed all repaired, the cyclone and flood would also result in lost economic output, the Treasury noted.

It said primary industries would have born the brunt of those costs, some of which would still be ongoing.

It estimated there would be a $400m to $600m hit from the loss of crops and other agricultural production during the first half of this year and “persistent losses” of about $100m a year, for example as a result of longer-term damage to orchards.

The Treasury’s estimates appear to broadly tally with an estimate from Federated Farmers in March that the extreme weather would cost farmers about $1b.