Cyclone Gabrielle’s trail of misery and destruction presents a major fiscal and political dilemma for the government: how should the country pay for the recovery? Does it borrow now and spread repayment over generations, or raise taxes in an election year?
Either way, the cost is significant. Finance Minister Grant Robertson has estimated the bill for fixing damaged or destroyed infrastructure at NZ$13 billion – equivalent to 11.5% of tax revenue collected in the year to June 2022.
