| | |
Homepage | login or create an account

Minister talks to banks about flexibility for quake victims

Fuseworks Media
Fuseworks Media
Bill English
Bill English

By Maggie Tait of NZPA

Wellington, Sept 7 NZPA - Banks and Inland Revenue have promised to be flexible for people recovering from the Canterbury quake but that will be tested over time, Finance Minister Bill English says.

Mr English spoke to all the bank chief executives yesterday following Saturday morning's 7.1 magnitude devastating quake.

"I was impressed with their willingness to be flexible, well as flexible as banks will be, but they indicated they understand their customers are under pressure.

"They have just been getting their own operations up and running again because their buildings and their staff were affected."

Mortgage holidays -- where repayments were deferred but interest still accrued -- would be on offer and Mr English hoped they would also be flexible about other loan repayments and overdraft limits.

"They do seem to be willing to be a bit accommodating. I think that is going to be tested and down the track...

"I think another important measure they can take is to be flexible about people's overdraft limits, you have people showing up to businesses on Monday with nothing to sell even though they've still got to pay wages. Then you have people... for instance, if they are in casual work and their work just stops.

"I would hope that the banks would be flexible about those overdraft limits."

The banks would have a key role to play along with insurance companies in the pace of reconstruction, given most homes had mortgages on them.

Technical decisions would be needed in some areas to decide whether rebuilds were possible, which could be another delaying factor.

IRD already had processes for dealing with disasters, Mr English said.

"We want IRD to show some flexibility about the terms of payment. We will be going back to have more discussions with them about that."

Prime Minister John Key said he would expect IRD to pull back on chasing payments for now.

Mr English said some businesses would not be able to pay wages and the Government would help.

Some people also would be unable to work because of stress or child care issues.

"I think the great uncertainty is just how long it's going to take some of these businesses to be able to get back up and running."

On the upside he said there would be demand for workers for reconstruction and support services for those workers.

The Government may need to borrow more to help with reconstruction. However, Mr English said the Government had been reassured by insurers and the Earthquake Commission they had the capacity to meet claims.

"That's good. The main liabilities will be picked up by the insurers but on the margins there is going to be some pretty tricky policy issues and questions about how the Government might or might not be involved."

About : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.