Hon Gerry Brownlee
Minister Responsible for Earthquake Commission

26 May 2017

Speech to Public Relations Institute of New Zealand

I assume the title ‘Seismic Shifts’ doesn’t require me to deliver a long, detailed dissertation on what many people here in Canterbury have lived through for more than six years, or to give you a lesson on the world’s tectonic plates.

It does, however, afford an opportunity to discuss changes in the structure of the economy and the role of communications and the public relation sector in getting information and messages to affected people.

Yesterday, Steven Joyce delivered the ninth Budget from a National-led government since 2008.

Quite apart from the many forward-thinking initiatives outlined in the Budget, there are two points that are worth noting: First, our surplus will track up to $7.2 billion in the next three years; and secondly, our core public debt will reduce to between 10 to 15 per cent beyond 2020.

It’s worth considering that projected surpluses – even though seemingly large amounts seldom materialise at those high levels – by their very existence afford any government the opportunity for spending on new programmes and/or debt reduction and tax reduction.

But deficits are real and if they are not dealt with, they will rapidly escalate.
Core public debt should be seen in the same light as household debt. The higher a household’s debt the more limited the choices for lifestyle.

Any government that has a combination of a large deficit and high core public debt is limited in how it can respond to the changing circumstances of the world we live in – whether they be geophysical, financial or social.

It’s the tangible seismic shift we had here in Canterbury in 2011 that, in many ways, best illustrates the importance of those numbers.

Low core Crown debt - at the time when the Global Financial Crisis was having its full effect on the New Zealand economy - allowed the Government, when faced with New Zealand’s biggest natural disaster, to go to the balance sheet and borrow to both stabilise the New Zealand economy and meet the unexpected expense of the Canterbury earthquakes – an event measured to cost 20 per cent of New Zealand’s Gross Domestic Product.

To put it into perspective, Sendai in Japan cost the Japanese economy about 4 per cent of its GDP while Hurricane Katrina cost the US economy about 2 per cent.

Fiscal prudence and the relentless pursuit of growth are important aspects of our nation and its citizens’ prosperity and it enables a sound response to events like the Christchurch earthquakes.

Post-quake, among the frantic activity of searches for survivors, emergency demolitions and the restoration of compromised services, dire predictions about the about the city’s future were floating about.

A number were the usual sort of offerings from the many of us who overnight became amateur geotechnical engineers, social scientists or demographers.

There were though four predictions which particularly encapsulated the problem that both central government and local government were facing.

- That the population would deplete.
- Real estate values will plummet and plateau for more than a decade.
- The city will be uninsurable.
- The economy will collapse with very high unemployment and welfare dependency.

Those were the predictions that from the start we set out to defeat.
With 167,000 homes damaged but repairable, the CBD in tatters and locked down with many other commercial premises severely affected, it was immediately important to have processes that could lead to rapid decision making by the government, households, businesses, and the NGOs that swung in behind traumatised communities.

You may be surprised to hear me say this but one of the most effective tools anyone has during the thick of a disaster is the broad reach that online and broadcast media have.

In a situation where no one knows completely what is going on, and remember we had 22 earthquakes over 4.5 on the Richter scale in the first five days after the February 22nd event, and everyone has opinions and everyone wants answers, but at the same time they want to grieve and they want to say get on with it, and as time progresses they become increasingly impatient, and it should just all be over by now.

To their great credit, the Christchurch Press, despite their building being inaccessible to reporters and editorial staff, and having had employees seriously injured and one killed, were still able to publish on the 23rd of February.

Just those few years ago the daily paper reflected a degree of if not normality then certainly continuity in the rhythm of life. I’m not sure we could say that today.

So what to communicate?

Initially it was about search and rescue. Then remedial work to reinstate water, electricity and sewerage, and about the provision of water tanks, port-a-loos and generators.

That gave time to do preliminary scoping of damage, consider some timelines and a plan for either remediation or replacement. The scope was 167,000 houses damaged but repairable. Between 25,000 - 30,000, ultimately up to 40,000 houses for demolition and replacement.

1800 commercial buildings in the CBD and suburbs requiring demolition.
Hundreds of kilometres of underground pipework damaged beyond repair.
1.3 million square metres of road surface, disrupted, distorted, and in some cases unpassable, all of which needed to be replaced.

And hundreds of acres of land with such increased vulnerability to liquefaction, lateral spread, cliff collapse or rock roll, that ongoing occupation would present not only a costly challenge to build on, but also carry an unacceptable life risk, if there was continued occupation.

With all the initial residential insurance claims going to EQC and then overcaps going to more than a dozen privates insurers with all commercial claims going entirely to private insurers, the total damage eventually added up to the world’s fourth largest disaster, measured by insurance exposure.

There was also the plethora of authorities, all with different responsibilities and statutory powers – The Christchurch City Council, Waimakariri District Council, Selwyn District Council, ECan, New Zealand Police, New Zealand Defence Force – all had their own lines of command structures and representatives of each inside Civil Defence which had assumed, if not responsibility then in the days following February 22, most certainly control.

In addition, government departments of welfare, housing, transport, economic development, justice, education, health and EQC – were part of the ODESK system operating out of the bunker in the Beehive.

While all of these did a good job and personnel put in consistently long hours for days, you can see the potential for differing and confused communication was high.

Communication will always be simpler in the cauldron of disaster response – there will be any number of people happy to offer their views and usually based on a collection of factual information that is about the moment, rather than the future.

To get clarity about what to do and to send messages about what will happen and how it could happen required all of the agencies of state, local government and private sector to recognise the exception of the circumstances that we were in.

Business as usual wouldn’t work in these circumstances.

Usual processes couldn’t meet expectations from a traumatised community.
To corral all of the many agencies who were all willing to do their bit, required significant central government funding, and a single point person in cabinet.
The appointment of a Minister responsible for Canterbury Earthquake Recovery heading a Christchurch based coordinating Ministry, was in my view, the right thing to do.

It allowed that Ministry to be the clearing house for multiple agency activities and to fill any vacuums identified in the recovery efforts.

I won’t go into the many programmes that CERA, as it became known, carried out over the years of its existence – But I suggest the regular flow of information to letterboxes and social media, along with the wellbeing surveys, were immeasurably helpful.

One programme – the land zoning programme – required extraordinary communications.

Not knowing what the earthquake sequence was doing to the geology beneath the city meant there could be no progress on rebuilding until that was established.

The first point was to get a picture of that land damage.

So there was a huge geotechnical exercise coordinated across the city, through CERA and paid for by EQC.

It established colours for different land classifications.

- White – we needed more information before making a decision.
- Green – it was all good to go.
- Orange – somewhat suspect.
- And red – probably unable to be used for the same purpose in the future.

That led to those red areas affectively receiving a communication that said, continued occupation on the land that you own, on the house that you own, would be unwise for the future.

At that point, choice also became a very important factor in moving forward.

So that communication also presented choices to people who received that very bad news.

They were simple choices.

One was simply to sell your house to the government at a 2007 valuation, which was actually markedly higher than valuations for some years to come.
Or you could choose to sell your land only to the government and settle the building aspects of the claim with the private insurer.

There was also the prospect that people could lift their house up if it was undamaged and place it on other land.

That required a huge amount of backroom effort with insurance companies – hours and hours to get an agreement that they would work with their reinsurers to allow something in their policies that may not have necessarily been there.

And we discovered through that process there were over 70 different types of policy that carried the title full replacement.

Simplifying that and putting it into clear communication that conveyed succinct choices for the nearly 8000 households who faced a very challenging decision to leave their homes was, by any measure, very successful.

Only a handful of affected homeowners chose to stay in the red zone.
The heart of that communication was the authoritative and factual base that led to the red zone land decision.

Screeds of technical data was synthesized into readable and simple to understand language.

The comms were also backed by hours of work with insurers to get agreement on the options for affected Cantabrians – and they worked.
Getting people back to work was an early priority.

Many small employers faced permanent, shutdown of their businesses.
The government made the decision that that could not be allowed to happen and announced an earthquake support subsidy package, which enabled employers with fewer than 20 staff to pay their employees while they dealt with the impact of the earthquake.

Many were initially hesitant but using the comms network of the Canterbury Employers’ Chamber of Commerce eventually saw over 10,000 sole traders and over 8000 employers were the recipients of the $195 million package.

To keep 47,000 employees in work for up to 12 weeks was essential in allowing affected businesses to pick themselves back up and reopen their doors.
I’d also like to talk about the influence that Public Relations firms have had throughout the recovery and regeneration.

Each time an investor or developer confirmed their rebuild plans or ambitions for the central city, an impressive amount of media coverage was generated.

The stories of Cantabrians committing to the city’s future, putting their money where their mouth is and backing the region’s regeneration are the stories I hear reported back to me by people across the country and on my trips overseas.

The effect of these abundant number of positive stories should not be underestimated and I believe it helped balance out some aspects of the recovery that attracted continual, although often unreasonable, negative coverage.

Today, Canterbury’s population has topped its pre-earthquake numbers.
Within 12 months real estate prices were on the rise and in 2017, the equity percentage average has risen beyond the 2010 average.

The insurance market stabilised within a year of the big quake and risk pricing in Canterbury is consistent with all of New Zealand.

And the economy here is growing faster than many other parts of the country and, despite the enormous challenges faced, our unemployment rate is below the national average – sitting at 4 per cent in the latest quarter.

You are part of a fascinating profession – in an age of instant communication, the ability to gather, assess and present from a client’s perspective any body of information will be in even greater demand in the future, regardless of the ever-growing range of communications hardware available to us all.

I wish you well with your conference and for your stay in Christchurch.

ends

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