EARTHQUAKE LOSSES

Nelson Evening Mail, Volume LXVI, 11 August 1934, Page 7

EARTHQUAKE LOSSES

FUND PROPOSED MR BARNARD’S BILL (By Telegraph) (From “The Mail’s” Parliamentary Reporter) WELLINGTON, 10th August The question of providing a reserve fund to meet losses in the event of earthquake was discussed in the House of Representatives following on a report by- the Public Accounts Committee on the Earthquake Protection Bill which was introduced by Mr W. E. Barnard (Labour, Napier). The Chairman of the Committee, Mr J. A. Nash (Government, Palmerston North) said that the Committee recomi: ended that the Bill be not allowed to proceed, as it involved an appropriation, but that on the return of the general manager of the State Fire Insurance Office, Mr J. H. Jerram, from England, where lie was investigating the" question of earthquake insurance the Government should set up a committee to go into the whole problem of earthquake insurance. The Committee appreciated the anxiety of the people of Hawkes Bay that something should be done, and when Mr Jerram returned there' should be sufficient data for a committee to work on and bring down a comprehensive scheme. Mr Barnard said he wished to thank the Committee for its sympathetic attitude towards the Bill. The problem was an urgent one, but one could hardly •>xpect that the Government would take action while Mr Jerram was making inquiries in England. Mr Jerram would be returning to New Zealand in October, and it was to be hoped that the Government would consider his report immediately, and if possible bring down legislation before the end of the session. The Bill was by no means an academic one, as the danger of future earthquakes was very real, although it was astonishing that people quickly forgot all about them. Earthquakes came like a tliief in the night, and those who did not realise their possibilities were living in a fool’s paradise. The question was by no means confined to Hawke’s Bay. The people of Hawkes Bay did not wish any other part of the Dominion to go through the experience of* that province, whert the rehabilitation programme had been left to the unfettered authority of a committee. Theirs had been a sorry experience. Mr A. J. Stallworthy (Independent, Eden): In what direction? REHABILITATION AT NAPIER Mr Barnard said that the rehabilitation had been carried out by means of loans, which were carrying an interest rate of 4& per cent., a much higher rate than was ruling to-day. They did not desire any other part of New Zealand to be placed in the same position. It had been stated: that some parts of the Doininon were immune from earth-. ouake activity, and it might be pleaded that they should be excused from taxation for the purpose of raising funds, but it was very questionable whether any part of the country had immunity. Furthermore, it had been shown in the Napier earthquake that everyone was anxious to help in the shattered area..} It had been suggested that, the fund might be drawn upon by some future Government in need of money. That was a possible danger, but it should not be impossible to tie fund up as a trust fund. Probably there would be a different financial system when the time arrived and there would be no reason for any anxiety. Tlie Prime Minister (the Rt. Hon. G. W. Forbes): There will be no money at all, then. Mr Barnard said that evidence had been given before the committee concerning the proportion of the. fund that should be made available for relief. The Treasury Department had suggested 75 per cent and the Hastings Borough Council 90 per cent. There was also the problem of the loss of property, and it had been suggested iliat a basis similar to that adopted bv fire insurance companies in cases of fire should be availed of. It had also been proposed that an insurance property tax should be instituted on an optional basis. INVESTED OUTSIDE NEW ZEALAND Another idea that had been put forward was that the fund should be invested outside New Zealand, but in view of the financial earthquakes that were taking place in various parts of the world this might not be a wise procedure. Air Stallworthy: What is the merit of the suggestion? Mr Barnard said it had been proposed that the fund should be invested in some country that was immune from earthquakes. He again urged upon the Government the necessity for bringing down legislation as soon as possible after the return of Mr Jerram.

Mr Forbes said that he could not understand the complaint made by Mr Bardard in connection with the rehabilitation of Hawkes Bay. Mr Forges asked whether Mr Barard thought that the money should be made available as a free gift. Mr Barnard: Not necessarily. Mr Forbes: The money was lent at a leasonahle rate' of interest. Mr Barnard: It might he preferable to charge no interest at all. BUSINESS PUBLIC TO DECIDE Mr Forbes said that the question of assistance had bean left to the business people themselves, who had been free to decide whether they should replace their businesses or not. For example, if a man who had been running a fruit shop in Napier found that it would not- pay him to re-establish his business because there had been insufficient business prior to the earthquake lie had not been obliged to apply for a loan. The Government realised that all reasonable safeguards should be taken to minimise the risk of lost of life and property in the event of earthquakes, and had set up a Committee which was preparing building regulations. When these were completed it was hoped that they would provide reasonable protection without involving unnecossar yexpenditure.

Mr D. ft. Sullivan (Labour, Avon) Will these regulations he compulsory?

Mr Forbes said that if local bodies did not adopt them, compelling legislation would be introduced. The Government had a responsibility to see that safeguards were taken by local bodies. IMPORTANT PRINCIPLE

The Leader of the Opposition [Mr M. J. Savage) said that the principle in the Bill was vorv important, because no part of New Zealand knew when

its turn would come. The Government * should take immediate action. There was a national responsibility; and “her •* contended that the people of Napier_ should not be asked to pay interest 6rr.,.v the money lent for repairing earthquake damage. A Committee of the House, assisted by experts, should investigate the position and make recommendations to the Government with a view to the passing of legislation. ' ."j'; Mr A. E. Jull (Government, Wai- ! y pawa) said that the principle- of the 1931 Bill had been approved by the commercial sections of Hie '■ J yet when the Bill, which provided for the striking of a flat rate on insurable values, went before a Committee, It was opposed by the chambers of, commerce and the fanning community. Mr Barnard: “And the Reform Party?” 'y r y • Mr-Jull: .“I: am not talking about q parties n.ow.” : He said that one shilling per cent, on the insurable values of yy the country would produce £2oo,Qfs,<a,..y t year. Later it might be -found expeqH y ent to reduce the amount of the pre,, mium. , !■:; ‘ Mr D. G. Sullivan (Labour,, .Avon). A;said that the cities would riot , object , V to the scheme, but what , would bo the .. attitude of the town boards which had objected to the original Bill?, A proper Bill was required as far as insurances were concerned, and a proper Bill was., required as far as building regulations , were concerned.

Mr A. J. Stallworthy (Independent, Eden) said there was a lot to be,said for a set of model by-laws administered by the local bodies. Mr R. McKeen (Labour, Welling- ; ton South) referred to the difficulty of local bodies enforcing model by-laws without the matter being undertaken from a national • viewpoint. The , Wellington City Council had sent out about,'. t ] forty notices to owners of buildings,., with a request, that dangerous qrnamen- ] tations be removed, but very few own- }q.,o ers had complied with, the request, The Government had complied, and the;, fi k council itself had gone to enormous expense in making its buildings as sqfe . as possible. A private owner might' not be in a financial position to under- - take the work, and unless something were done nationally„to compel persons to make their buildings safer, it would ; ■ never be done.

_ Mr R. A. Wright (Independent, Wellington Suburbs) said that the local bodies should be the authorities to deal Avitli the matter. Objection to the pay-”" ment of an insurance'rate would no* doubt be made from districts which seemed to be immune from earthquakes. He did not know whether, there could , be a preferential rate, or whether the *' districts could be. omitted altogether, a large part of New Zealand needed pro- * tection, and he hoped that the Government would set up the Committee as ’ recommended by the report, with a view > to the passage of legislation next ses- ‘ sion. 1 “

The report was tabled. •;, OPINION IN NAPIER '

“Had the Government,-acted,;in July,'! , ! 1932, there would have been a sum of ", approximately £250,000 available when f the Dannevirke-Eketahuna earthquake i occurred,” said Councillor R. M. Chad- * wick at a meeting of the Napier City Council, in reference ao a motion that 1 f the council affirm the necessity of the Government adopting some measure of protecting the finances of the people * against earthquake. 4 . • Councillor M. S. Spence stated that the matter had been discussed at a ~ j meeting of the Associated Chambers ot,', ._ ' Commerce in Wellington. He urged,.'-, ' that the fund should be established; that should be invested outside New > Zealand, and that it should not. be,sub-“ " ject to Government control. “If it -is A v outside the control of the Government. j then there will be no-fear of the fund being borrowed temporarily, as was the l case witli the road fluids,” ho said. “I pointed out at the meeting that,.,where- ’ as there would, probably b e a few .who' ' insured against earthquake, there would be thousands who did not do so.. This.,. . * matter had been supported by the 4 ' « Auckland Ciiamber of Commerce, and , there is no body more .qualified to give i 4 evidence than this council,!’, he con- < eluded. . ,<■ ,

Several members spoke strongly in I favour of an insurance scheme, remarking that Napier, better than any other ■>'- town in the Dominion, knew what iu was talking about. ■ The council gave the motion unanimous support, and will make written representations to the Government. ,