The Earthquake Commission Minister has admitted the Government is planning to bail out the commission, which is running out of money, and it could cost hundreds of millions of dollars.
The financial aftershocks of three major earthquakes are still hitting the Government's books and are about to get a lot worse.
Minister Megan Woods told Q+A there's $370 million left in the natural disaster fund.
"When that figure dips below $200 million the EQC will write a letter to myself and the Minister of Finance and say 'we're running pretty low'," she said.
"The advice I have is that will happen reasonably soon."
The Earthquake Commission's war chest is a shadow of it's former value. Worth $6 billion in 2010, it's now down to $370 million.
The costs of the Canterbury and Kaikoura events will exhaust all of that, this year.
Asked is the Government's going to have to bail out the natural disaster fund, Ms Woods said," Well it's called the crown guarantee and I think it's one of the things New Zealanders can be proud of and have some certainty around EQC is the fact that when the fund does run out that there is a crown guarantee."
It comes as EQC faces a possible $1 billion blowout for botched repair jobs after the Canterbury quakes.
Leeann Watson of the Canterbury Employers' Chamber said those homeowners find themselves in this situation through no fault of their own.
“It could be up to half a billion dollars. So it could come out of health and education
"And we need to have an outcome for our homeowners in Christchurch urgently," she said.
However, National is warning the re-repairs issue is likely to affect EQC's ongoing health.
"The open-ended nature of EQC's claims seems to be quite an issue. So people can keep coming back to EQC, and I think that's a problem that needs to be sorted out," said Stuart Smith, National's EQC spokesman.
But it's also likely to hit the Government's bottom line and upcoming Budget.
Political scientist Bryce Edwards said it could be up to half a billion dollars.
"So it could come out of health and education because we've got a Government that refuses to go beyond those budget responsibility rules that they self-imposed a year ago. And so it means that they're not willing to borrow," he said.
The question now is whether the Government will be forced to take money from somewhere else to foot the bill.
SHARE ME